Hello, smitha1977.

I'd like to share some additional steps to help you record the transactions.

The steps shared by my colleague ShiellaGraceA is for the Desktop version of QuickBooks. If you are using QuickBooks Online, you can record a stop payment by creating a check to refund the customer. This helps reduce your bank balance and offset the customer's prepayment.

To refund your customer, here's how:

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

After the steps, let's link the refund to the customer's credit or overpayment.

Here's how:

1. Go back to + New > Receive payment.
2. Select the same customer you used for the check or expense when recording the refund.
3. Fill out the other fields as you see fit.
4. Under the Outstanding Transaction section, mark the check you've created when recording the refund. Make sure the payment is equal to the open balance.
5. Click Save and close.

In addition, you can check out this article for more details about recording the customer refund: Void or refund customer payments in QuickBooks Online.

Please don't hesitate to post a reply on this thread if you have any additional questions about the process or other concerns. I'll be right here to help you.