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mrosefelt
December 29, 2023
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Bookkeeping Returned Paycheck

  • December 29, 2023
  • 1 reply
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I have 4 returned checks from a contractor. As each arrived I used 'Make Deposit' from the contractor using the same generic expense account as the original check. However, the deposit does not appear in the contractor's vendor transactions.

In an effort to credit the returned-check-deposit to the contractor, I've created a credit memo listing all 4 checks. The credit memo shows up in the contractor's vendor transactions and also in A/P.

Is this the correct approach, and if so how do I offset the credit memo in AP?

Thanks.

Best answer by GenmarieM

Thank you for getting back here at the Community, @mrosefelt.

 

I am here to provide detailed steps for depositing your return and how to offset your credit memo in Accounts Payable.

 

To deposit your returned check, make the account as the Accounts Payable (A/P). Next, to offset your credit memo you'll need to Pay Bills.

 

Here's how:

 

Record a Deposit of the vendor check:

 

  1. Go to the Banking menu, then select Make Deposits.
  2. If the Payments to Deposit window appears, select OK.
  3. In the Make Deposits window, select the Received from drop-down and choose the vendor who sent you the refund.
  4. In the From Account drop-down, select the appropriate Accounts Payable account.
  5. In the Amount column, enter the actual amount of the Vendor check.
  6. Enter the remaining information in the Deposit.
  7. Select Save & Close.

    Record a Bill Credit for the refunded amount:

 

    1. Go to Vendors, then select Enter Bills.
    2. Select Credit and enter the Vendor/Contractor name.
    3.  Select the Expenses tab and enter Accounts on the original bill.
    4.  Enter the amount for each Account then select Save and Close.

      Link the deposit to the Bill Credit:

    1. Go to Vendors, then select Pay Bills.
    2. Check the Deposit that matches the Vendor check amount.
    3. Select Set Credits and apply the Bill Credit you created earlier, then select Done.
    4. Select Pay Selected Bills, then select Done.

 

Furthermore, I'm adding this helpful article as your reference in setting up direct deposit for your contractors: Set up and manage direct deposit for your contractors.

 

Feel free to return to this post if you have other concerns or follow-up questions regarding the returned paycheck and offsetting your credit memo. I'll be here to provide further assistance. 

 

 

1 reply

G
GenmarieM
December 29, 2023

Welcome to the Community space, @mrosefelt.

 

I am here to provide some insights into depositing your returned paychecks and how to offset your credit memo in Accounts Payable (A/P).

 

When depositing your returned paychecks, make the accounts payable as the affected account. Also, to offset or link the credit memo you've created and the deposit, you'll need to Pay Bills. 

 

Additionally, I'm adding this helpful article as your reference in paying your contractor through direct deposit: Pay a contractor with direct deposit.

 

Feel free to return to this post if you have any additional concerns or follow-up questions regarding QBDT. I am available to offer further assistance.

M
mrosefeltAuthor
December 29, 2023

Hi Genmarie,

Could you provide full details (all of the steps) for the solution you are suggesting?

Thanks.

Mitch

G
GenmarieMAnswer
December 29, 2023

Thank you for getting back here at the Community, @mrosefelt.

 

I am here to provide detailed steps for depositing your return and how to offset your credit memo in Accounts Payable.

 

To deposit your returned check, make the account as the Accounts Payable (A/P). Next, to offset your credit memo you'll need to Pay Bills.

 

Here's how:

 

Record a Deposit of the vendor check:

 

  1. Go to the Banking menu, then select Make Deposits.
  2. If the Payments to Deposit window appears, select OK.
  3. In the Make Deposits window, select the Received from drop-down and choose the vendor who sent you the refund.
  4. In the From Account drop-down, select the appropriate Accounts Payable account.
  5. In the Amount column, enter the actual amount of the Vendor check.
  6. Enter the remaining information in the Deposit.
  7. Select Save & Close.

    Record a Bill Credit for the refunded amount:

 

    1. Go to Vendors, then select Enter Bills.
    2. Select Credit and enter the Vendor/Contractor name.
    3.  Select the Expenses tab and enter Accounts on the original bill.
    4.  Enter the amount for each Account then select Save and Close.

      Link the deposit to the Bill Credit:

    1. Go to Vendors, then select Pay Bills.
    2. Check the Deposit that matches the Vendor check amount.
    3. Select Set Credits and apply the Bill Credit you created earlier, then select Done.
    4. Select Pay Selected Bills, then select Done.

 

Furthermore, I'm adding this helpful article as your reference in setting up direct deposit for your contractors: Set up and manage direct deposit for your contractors.

 

Feel free to return to this post if you have other concerns or follow-up questions regarding the returned paycheck and offsetting your credit memo. I'll be here to provide further assistance. 

 

 

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