How do I record a deposit that was made by one client by mistake and O then refunded the money

Hello @vanessa-jean ,

1. First you would click on the +New button and then click on Receive Payment.

2. Receive a payment from this customer as you normally would.  It will warn you that there is no invoice to apply the payment to but go ahead and save it anyways.

3. Then go to write Cheque.  Write a cheque to the customer name and for the amount your refunding.  In the category field you will type in your Accounts Receivable account from your COA.  Fill in memo field with something like 'Refund customer payment made in error'.  Tab over to the Customer/Project field and type in the name of the customer.

4. Go to the Customer view of the customer you are refunding.  You will now see two lines in their record; one for the cheque you wrote with a status of Paid, and one for the Receive Payment you recorded with a status of Unapplied.

5. Go back to Receive Payment and type in the customer name again.  Both transactions will be showing.  Make sure each line has a green check mark to the left of it.  Click Save and Close.

6. In this customer's view you will note the payment line now has a status of Closed, meaning the payment has been applied to the cheque you wrote, clearing both lines so that they do not show up on an A/R report.

This procedure will accept your customer's payment and allow you to deposit to the bank and then cut a cheque to the customer for the refund, all while keeping track of the transactions in this customer's profile within your A/R module.

Hope it helps. :)