How to bookkeep a refund from a vendor for an overpayment?

You can create a credit memo to offset the balance with the bank fee, Leslie2557. I can show you the process to ensure the vendor's account is properly credited.

Let's start by entering a vendor credit of $10 to hit the expense account you use for this vendor. I'll show you how.

1. Go to the +New button and select Vendor credit under the Vendors column.
2. Choose your vendor in the Vendor dropdown.
3. Depending on how you record purchases, enter the Category details or Item details and input $10 in the Amount column.
4. Tap Save and close.

Once done, create an expense transaction for the wire fee incurred and deposit entry. Follow the steps below:

1. Navigate to the +New tab.
2. Under the Vendors column, choose Expense.
3. Click Add all on a small window with the deposit and vendor credit shown on the right side of your screen.

Here's an article for other methods according to your situation: Enter vendor credits and refunds in QuickBooks Online.

To include processing fees in the original transactions in the future, refer to this guide: Record and make bank deposits in QuickBooks Online.

Clearing the negative balance and keeping your accounts accurate is our goal. We're here to help you with any accounting concerns. Have a wonderful day ahead!