We have a supplier who is also our client. After we do contra, it shows that we have overpaid them by $200. What should be the entries to zero off on the overpaid?

I know a way to get back and record your overpayment to your supplier in QuickBooks Online (QBO), activia.

Since you overpay them by $200.00, you can ask your supplier for a refund for the said amount and enter this transaction within your company file. You can enter expenses or write cheques and ensure to post the amount to the bank where the $200.00 was taken out for.

Once you have the refund, we can start recording it by following the steps below:

1. Click the + New icon and select Bank Deposit.
2. In the Add funds to this deposit section, enter the amount refunded by your supplier and choose the Category/Account that has been selected on the initial expense or cheque.
3. Tap the Select the payments included in this deposit, if you deposited customer payments for invoice into the bank account along with the supplier.

Moreover, you can check out this article for more details: Enter supplier credits and refunds in QuickBooks Online.

Let me know if you need further assistance in managing supplier refunds or any QuickBooks-related matters. I’m always here to help.