jim77144
Level 2
‎March 13, 2023 09:35 PM

Customer refund is showing as a credit

I searched the refund threads but I don't see the same scenario. The customer was double charged for the invoice so I needed to issue a refund. I created a customer refund through the (+New- Refund receipt) but I am still showing a credit on the customer's account. The customer paid via credit card so I needed to refund the credit card. I added the refund receipt to the credit card bank deposit so that the credit card deposit matched the bank.

1. Original invoice $161.12 paid

2. Payment $161.12 closed

3. Payment $161.12 unapplied

4. Refund$161.12 paid. 

 

Did I do something wrong in creating the refund receipt that caused it not to be applied to the double charge?

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AbegailS_
QuickBooks Team
QuickBooks Team
‎March 13, 2023 10:54 PM

Other questions

Hi there!

 

Let me provide the right step to remove the credit. You need to record the refund using Check or Expense in QuickBooks, not the refund receipt. This offsets the customer's open credit, overpayment or prepayment. Don't forget to delete the refund receipt later.

 

Here's how to record the refund to the customer.

 

  1. Click + New.
  2. Select Expense, Add expense or Check.
  3. Select the customer you want to refund from the Payee ▼ drop-down.
  4. From the Payment account ▼ drop-down, select the bank account where you deposited the overpayment to.
  5. On the first line of the Category column, select Accounts Receivable.
  6. Enter how much you want to refund in the Amount field.
  7. Fill out the other fields as you see fit, then click Save and close.

 

The steps of recording refunds will vary depending on whether you use QuickBooks Online or QuickBooks Payments. You can browse these articles to learn the different ways of processing a refund.

 

Don't hesitate to post again here if you have any other concerns about processing customer payments. I'm just a post away to lend a hand. Have a good one and keep safe. 

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jim77144
Level 2
‎March 13, 2023 11:43 PM

Other questions

Thank you for the reply.

 

A previous QBO rep told me to record the refund receipt in this manner so that I could balance my deposits. The first issue I was having was matching and balancing deposits because there was a refund on them. The amounts didn't line up and could not be matched to reconcile the bank acct. 

 

They explained to create a refund receipt for the undeposited funds so that I could add the negative amount to the deposit and then it was able to balance and match.  

 

If I delete the couple of refunds, my deposits and bank statements will be off. Is there another way to handle this issue so the refund is there but I can also match the deposits?

 

Thanks

Jim 

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JessT
Moderator
Moderator
‎March 14, 2023 02:32 AM

Other questions

Hi Jim!

 

I'll continue to help you with your transactions so you can proceed to reconciliation.

 

It's right to record the credit card refund as a Refund Receipt. Just make sure to select your bank account in the Refund from field so the transaction is posted as a money-out entry there. You should then be able to reconcile your bank account.

 

On the other hand, the unapplied payment is still showing open in the customer's profile and credits (negates) your A/R. Then, the refund receipt also debits the income account assigned to the item used in it, which shouldn't be the case because you're just returning the overpayment. You can reverse these postings through journal entry.

 

  1. Click the +New and choose Journal Entry.
  2. On the first line, enter the following details:
    • ACCOUNT: A/R
    • DEBIT: 161.12
    • NAME: choose the name of the customer.
  3. On the second line, enter the following details:
    • ACCOUNT: income account assigned to the item in the refund receipt
    • CREDIT: 161.12
  4. Click Save and close.

 

After the journal entry, create a Receive payment transaction to link the unapplied payment to the journal entry to close them.

 

  1. Click the +New and choose Receive payment.
  2. Choose the name of the customer as the Payee.
  3. Select the Journal Entry in the Outstanding Transactions section.
  4. Select the Unapplied Payment in the Credits section.
  5. Click Save and close.

 

You can check your customer's balance, and run your financial reports like the Profit and Loss and Balance Sheet to see the effects. 

 

Feel free to go back to this thread if you have any other questions in mind. Take care and have a good one!

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jim77144
Level 2
‎March 14, 2023 03:55 PM

Other questions

Thank you for this solution. This worked perfectly and fixed my problem.

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Kurt_M
Moderator
Moderator
‎March 14, 2023 04:26 PM

Other questions

Hi there, @jim77144.  

 

I'm happy to hear you're able to get through this with the help of my colleague, @JessT. Thank you for getting back here in the thread.

 

We'll be more than happy to assist if you have any additional QuickBooks-related concerns. Stay safe, and have a nice day! 

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