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Steven_ZA
October 2, 2021
Question

How to recon bank statement amount with payment when it includes a refund

  • October 2, 2021
  • 2 replies
  • 0 views

We get deposits from our payment processor which sometimes includes refunds and so is less than the full payment amount.

 

ie. there was a payment of R200 but also a refund of R50 on the same day. We then only get a deposit of R150.

 

The R200 is created as a payment and linked to an invoice. The R50 refund is created as an expense (because there is no invoice or goods attached, and so can't be a refund receipt).

 

The problem: how do I link the bank statement line of R150 with the payment (R200) and expense (-R50)? Note: it's important that the expense can be created outside of the bank recon as a separate action (since it will be automated via the API), and so we don't want to use the "Resolve" option on the bank recon to create the expense there - we need a way of linking already created documents.

 

I appreciate any help. Thanks.

2 replies

DivinaMercy_N
DivinaMercy_N
October 2, 2021

Thanks for being detailed about your concern, @Steven_ZA. I'm here to help you link the bank statement to the payment and expense.

 

In QuickBooks Online (QBO), the option to match both expense and deposit to a single transaction from Online Banking is unavailable. To help you fix this, you'll have to create a clearing account. This is used to move funds from one account to another. This is similar to a holding account where your funds are kept until you're ready to transfer them. Let me guide you how:

 

  1. Log in to your QBO account and go to the Gear icon.
  2. Choose Chart of Accounts.
  3. In the Chart of Accounts screen, select the New tab.
  4. Pick Bank for the Account Type. You can select any detail type you like for the clearing account.
  5. Enter the Name for the account.
  6. Ensure you don't input in any amount on the balance before clicking Save and Close.

 

To get more information about this, you can open this article: Set up a clearing account. This is a QuickBooks Desktop article and also applies to QBO when using a clearing account.

 

Once done, you'll have to put the payment and the deposit in the clearing account so the balance of the account can be zeroed by your bank. Then, match that to online banking.

 

When everything is fine, you can now reconcile your bank account. 

 

You can also generate a handy copy of your reconciliations to have a reference guide in the future. To have one, check out this article for the detailed steps: How do I view, print, or export a reconciliation report?. You can either print or export it and save it on your desktop folder. 

 

You can count on me if you ever need additional help with reconciling your bank in QBO. I got your back. Keep safe always.

S
Steven_ZAAuthor
October 3, 2021

Thanks. I guess this is the only way. However, please explain this part in detail:

 

"Once done, you'll have to put the payment and the deposit in the clearing account so the balance of the account can be zeroed by your bank. Then, match that to online banking."

 

Edit: Potentially something like this?

 

1. Payment "Deposit To" set as the Clearing Account

2. Expense "Payment Account" set as the Clearing Account

3. Journal Entry to move the balance to the "Undeposited Funds"

4. Match the Journal Entry to the Online Banking deposit

T
TirzahC
October 3, 2021

Hello there, Steven_ZA.  

 

In QuickBooks, a clearing account is used to move money from one account to another without moving it directly. This is like a holding account that holds your fund until you’re ready to move it.   This account is also called a Barter or Wash Account that has a balance of $0.00 because we always take out the amount we put in. Also, you won’t have to reconcile this account as this doesn’t hold any funds.    

 

 Also, if you need some references in the future, you can always access our site: Help articles for QuickBooks Online.    

 

If you have other questions in mind, please place them here. Anytime I can help. Have a safe day ahead! 

M
mv32
October 3, 2021

Thanks for adding a few details to make sure we can match the transactions from your bank, @Steven_ZA.

 

To match them, you can record the payment received (R200) and put it in the Undeposited Funds account (this will place the money on a clearing account until you deposit the funds to your bank). Then for the expense/refund (R50), you can create a bank deposit and add it as a new category/account in the Add funds to this deposit section to track the expense. Also, ensure to enter a negative amount to minus it with the invoice payment.

 

This way, you can link the expense/refund with the invoice payment and able to get the R150 total and match it with the bank statement line of R150 in a single deposit. Furthermore, this won't make use of the Resolve option when matching the records in QuickBooks with the bank statement.

 

Here are the steps to follow:

  1. Click +New and then select Receive payment.
  2. Choose the client name from the Customer drop-down list.
  3. Enter necessary details like Payment date, Payment method, Reference no., and then select the Undeposited Funds account in the Deposit to drop-down.
  4. Check the invoice box you want to apply for the R200 payment.
  5. Hit Save and close.

 

Once done, you can create a bank deposit to choose the invoice payment and add the expense/refund manually as a new category to link the two transactions.

 

  1. Hit the +New above the left menu, then select Bank deposit.
  2. Choose your bank account in the Account drop-down list you need to deposit the money into.
  3. Check the box for the R200 worth of invoice payment.
  4. In the Add funds to this deposit section, you can enter the R50 (-50) worth expense/refund (click +Add new to create a new category/account) to negate the invoice amount.
  5. Click Save and close.

 

When you match transactions in the For review tab of the Banking page, QuickBooks will automatically detect the bank deposit recorded when you click the R150 worth entry in the bank statement. You can easily match or confirm it thoroughly.

 

If you matched the transactions recently with the incorrect transaction, you can go to the Categorised tab and click the Undo button to return the entries in the For review tab.

 

I've added some references to get more details about matching and categorising transactions from your bank and reconciling bank accounts in QuickBooks Online:

 

Categorise and match online banking transactions in QuickBooks Online.

Reconcile and account in QuickBooks Online.

 

It's good to know your interest to learn more. If you have additional questions about recording transactions and matching them with your bank statement/online banking, feel free to tag me (@Jovychris_A) and my other peers in your comment. We'll make sure to help you. Have a nice and prosperous day ahead!

S
Steven_ZAAuthor
October 7, 2021

Thanks for the detailed reply. This does seem to be a better way than using a journal entry. My last question though is regarding the recording of the expense details as a negative on the bank deposit.

 

In terms of the "Received From" and "Category/Account", do I match what the expense has since the expense has already been created? So if the expense has the Payee "Test Customer" and the Category "Bank Account", will the bank deposit line for it be the same? That won't cause duplicate transactions?

E
Ethel_A12
October 7, 2021

Hello there, @Steven_ZA.

 

Let me add some information about recording a payment with the refund.

 

I understand you created an expense for the refund amount as advised by one of m colleagues above. However, an expense transaction will show in your Profit & Loss report in a positive amount.

 

I suggest you follow the recommended steps from Jovychris_A. You can delete the expense transaction and record the refund in a negative amount when adding a Deposit.

 

I'm also adding this article as your reference in reconciling an account: Reconcile and account in QuickBooks Online.

 

If you have any questions about recording the refund amount of the payment received, let me know in the comment section. I'll be glad to share and provide further assistance.

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