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Steven_ZA
Level 3

How to refund payment that is not linked to an invoice?

I have a customer payment that ended up being refunded. There is no invoice, just the payment. How do I go about doing the refund? If I choose Refund Receipt it expects a product or service to be entered, but since there's no corresponding invoice, there is no product/service to enter. Is the only way to void the payment?

 

My other question is: what happens if the payment is received via the bank recon and linked to the payment, and then we need to refund the payment. This happens with card payments where we receive the full funds as a deposit, but then if it's refunded, the amount is removed from a future deposit. So the payment may initially be linked to a bank recon line, but then it needs to be refunded when the future deposit (less the refund amount) is received. How best should I tackle this?

 

Thank you.

Recent

Solved
Best answer August 20, 2021

Best Answers
Rasa-LilaM
QuickBooks Team

How to refund payment that is not linked to an invoice?

I’ve got you covered, Steven_ZA.


We can create a check or expense and then link it to the refund payment. This will reduce your bank's balance and offsets the customer's open credit, over payment or prepayment. I’ll help make sure the process is a breeze for you.


To record the refund:

 

  1. In your company, tap the New menu in the upper right and choose Expense or Cheque.
  2. This action will take you to the transaction’s page.
  3. Press the Payee drop-down and select the customer’s name.
  4. From the Payment account drop-down, pick the bank account to where you deposited the over payment.
  5. In the Category details section, go to the first line and enter Accounts Receivable in the Category column.
  6. Enter how much you want to refund in the Amount field.
  7. Fill in the remaining fields with the correct information.
  8. Click Save and close.

 

Next, link the refund to your customer’s payment. For detailed instructions, perform Step 2 in this article: Record a customer refund in QuickBooks Online.


In regard to the other question, your reconciliation information will still be in order as long as you’ll not delete or edit any transactions. If there are any changes to the entries, I recommend consulting with an accountant to avoid throwing off your records.


For additional resources, let me share some links that will guide you on how to manage a customer credit or overpayment. From there, you’ll learn how to track excess payments, void or refund a transaction.

 

 

Drop a comment below if you have additional questions about processing refunds or other customer related-concerns. I’m always ready to assist further. Have a great day ahead.

View solution in original post

4 Comments 4
Rasa-LilaM
QuickBooks Team

How to refund payment that is not linked to an invoice?

I’ve got you covered, Steven_ZA.


We can create a check or expense and then link it to the refund payment. This will reduce your bank's balance and offsets the customer's open credit, over payment or prepayment. I’ll help make sure the process is a breeze for you.


To record the refund:

 

  1. In your company, tap the New menu in the upper right and choose Expense or Cheque.
  2. This action will take you to the transaction’s page.
  3. Press the Payee drop-down and select the customer’s name.
  4. From the Payment account drop-down, pick the bank account to where you deposited the over payment.
  5. In the Category details section, go to the first line and enter Accounts Receivable in the Category column.
  6. Enter how much you want to refund in the Amount field.
  7. Fill in the remaining fields with the correct information.
  8. Click Save and close.

 

Next, link the refund to your customer’s payment. For detailed instructions, perform Step 2 in this article: Record a customer refund in QuickBooks Online.


In regard to the other question, your reconciliation information will still be in order as long as you’ll not delete or edit any transactions. If there are any changes to the entries, I recommend consulting with an accountant to avoid throwing off your records.


For additional resources, let me share some links that will guide you on how to manage a customer credit or overpayment. From there, you’ll learn how to track excess payments, void or refund a transaction.

 

 

Drop a comment below if you have additional questions about processing refunds or other customer related-concerns. I’m always ready to assist further. Have a great day ahead.

Steven_ZA
Level 3

How to refund payment that is not linked to an invoice?

Thank you. That does help.

 

Just one more question: If the received payment has not been linked to a bank record, I should set the Expense "Payment account" to "Undeposited Funds" (same as the received payment)? And if it has been linked, I then should set the bank account it was linked to? (this can happen if the payment processor processes the refund from the same pool that the initial payment was made before being deposited into our account)

 

So basically, I need to know if the payment being refunded has been recon'd to a bank account or not to ensure I choose the right Payment account.

Jen_D
Moderator

How to refund payment that is not linked to an invoice?

Glad to have you back in our support page for QuickBooks, Steven.

 

I'm delighted to know that my colleague's answer helped you. Joining the thread to share additional insights about this payment concern.

 

Yes, you're on the right track. You can hold the amount in the Undeposited Funds if the refund still didn't hit the bank. Then, deposit it to its respective register once you see it in your bank statement as cleared.

 

This way, you'll be able to reconcile your accounts properly and your bank balances are accurate.

 

For other concerns about customer payments or refunds, post them again here. I'll be right here to help you. Have a wonderful day!

Steven_ZA
Level 3

How to refund payment that is not linked to an invoice?

Edit: Figured out my mistake, so removing this post :P