Reversed Vendor Overpayment

I-B · ‎December 22, 2020

I have a vendor who accidentally paid me twice for the same invoice. I entered the invoice with the proper amount, then I entered their payments against the invoice so they have a credit. However, they now went and reversed the payment at the bank so they've now effectively paid the correct amount but I need to reconcile the books with the bank transactions. How do I do that exactly? I tried to write a cheque from the bank account so I'd have a negative transaction in QuickBooks to reconcile with the bank transaction file but this doesn't end up removing the credit. Thanks for any help.

KlentB · ‎December 22, 2020

I can definitely help you with that, I-B.

When a customer overpays you, you can refund them from their credit memo or directly write a refund check to offset the amount on your Accounts Receivable. Since they've reversed it, you'll have to link the check you've created to the overpayment so that the amount of the credit will be zeroed out. Here's how:

Select Customers from the top menu bar.
Choose Receive Payments.
From the Received from drop-down menu, select the Customer.
Click the Discounts and Credits icon.
In the Available Credits section, select the check you created and then Done.
If you'll be prompted to confirm the transfer, click Yes. Once done, the amount will be applied automatically to the invoice.
Hit Save & Close to complete the process.

To learn more about this process, you can check this article: Give your customer a credit or refund.

I also recommend reading our Reconciliation Guide to help keep your accounts balance and up-to-date.

Keep me posted if you have any other concerns or follow-up questions. I'll be more than happy to assist you again.

View solution in original post

KlentB · ‎December 22, 2020

I can definitely help you with that, I-B.

When a customer overpays you, you can refund them from their credit memo or directly write a refund check to offset the amount on your Accounts Receivable. Since they've reversed it, you'll have to link the check you've created to the overpayment so that the amount of the credit will be zeroed out. Here's how:

Select Customers from the top menu bar.
Choose Receive Payments.
From the Received from drop-down menu, select the Customer.
Click the Discounts and Credits icon.
In the Available Credits section, select the check you created and then Done.
If you'll be prompted to confirm the transfer, click Yes. Once done, the amount will be applied automatically to the invoice.
Hit Save & Close to complete the process.

To learn more about this process, you can check this article: Give your customer a credit or refund.

I also recommend reading our Reconciliation Guide to help keep your accounts balance and up-to-date.

Keep me posted if you have any other concerns or follow-up questions. I'll be more than happy to assist you again.

I-B · ‎December 22, 2020

Hi KlentB, thanks so much for your fast reply. I'm looking at the Receive payments after selecting the customer but the Discounts and Credits button is disabled. However, at the bottom of the screen it does say 'Available Credits' and shows the amount of the overpayment. Any idea why the button would be disabled? Thanks.

JonpriL · ‎December 22, 2020

Hello @I-B,

The Discounts and Credits button is disabled or grayed out once there's no transactions that the credits can be applied to. Let show you a few screenshots for visual reference.

Additionally, I've also included this helpful reference for compilation of articles to help organize your customer transactions: Learn the different ways you can track customer transactions in QuickBooks Desktop.

If you have any other questions, please let me know by leaving any comments below. I'll be here to lend a hand.

AndyG5 · ‎March 16, 2023

I followed all the steps in the original answer and got to the same point where the Discounts and Credits button is disabled. I see from your screenshots that if there were transactions, the buttons would not be disabled. However, in my case there are no more transactions for this customer. What should I do to proceed with the steps in the orignal answer?

Thank you

Angelyn_T · ‎March 16, 2023

Hi, @AndyG5. I'm stepping into the thread to share information about applying credit to customer transactions in QuickBooks Desktop (QBDT). This way, you'll be able to proceed with soliciting the available credits by clicking on the Discounts and Credits button.

Credits will only be used when there's an existing customer invoice or balance. The Discounts and Credits button will be disabled once the system finds no transactions to be applied.

I can think of two options to apply for the credits. First, delete the recorded payment linked to your customer invoice. Then, associate the existing credits from there.

Locate payment from the customer's transactions list.
Open the transaction.
Select Delete, then OK.

Once done, you'll now be able to click on the Discounts and Credits button and select the available credits under the Discount and Credits window.

The second one is to use the credits for your customer's future invoices or issue a check to refund the amount.

Open the credit memo.
Click on Use credit to give refund.
Fill in the details on the Issue a Refund window.
Hit OK.

I'm adding this material for more hints while managing unused credits in QuickBooks: Give your customer a credit or refund in QuickBooks Desktop for Windows.

Aside from that, you can also open this link know more about the different ways you can track customer entries in our system: Get started with customer transaction workflows in QuickBooks Desktop.

I'm pleased to share these details with you today. If you have follow-up questions, let me know by leaving a comment below. I'm just a few clicks away to help. Keep safe!

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Reversed Vendor Overpayment