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vespinoza-gcinca
November 11, 2022
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A customer overpaid on an invoice and I issued a refund but, why does a credit show owing to the customer?

  • November 11, 2022
  • 1 reply
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One of your customer's overpaid and I issued a refund. But, the way I issued the payment was thru the refund receipt. There I was able to choose the option to print the check later. When I printed the check the refund did show paid out in the customer's account but, it also show a credit owing. How can I fix this issue?

Best answer by MaryLandT

Hi there, vespinoza-gcinca.

 

I can tell why credit is showing up on the customer's account. This happens when the amount received is more than the invoice.

 

Let me provide the right step to remove the credit. You need to record the refund using Check or Expense in QuickBooks, not the refund receipt. This offsets the customer's open credit, overpayment or prepayment. Don't forget to delete the refund receipt later.

 

Here's how to record the refund to the customer.

 

  1. Click + New.
  2. Select Expense, Add expense or Check.
  3. Select the customer you want to refund from the Payee ▼ drop-down.
  4. From the Payment account ▼ drop-down, select the bank account where you deposited the overpayment to.
  5. On the first line of the Category column, select Accounts Receivable.
  6. Enter how much you want to refund in the Amount field.
  7. Fill out the other fields as you see fit, then click Save and close.

 

The steps of recording refunds will vary depending on whether you use QuickBooks Online or QuickBooks Payments. You can browse these articles to learn the different ways of processing a refund.

 

 

I've modified the steps from my previous post @vespinoza-gcinca. Please check again and get back to me if you have follow-up questions. Thank you and have a great day!

1 reply

MaryLandT
MaryLandTAnswer
November 11, 2022

Hi there, vespinoza-gcinca.

 

I can tell why credit is showing up on the customer's account. This happens when the amount received is more than the invoice.

 

Let me provide the right step to remove the credit. You need to record the refund using Check or Expense in QuickBooks, not the refund receipt. This offsets the customer's open credit, overpayment or prepayment. Don't forget to delete the refund receipt later.

 

Here's how to record the refund to the customer.

 

  1. Click + New.
  2. Select Expense, Add expense or Check.
  3. Select the customer you want to refund from the Payee ▼ drop-down.
  4. From the Payment account ▼ drop-down, select the bank account where you deposited the overpayment to.
  5. On the first line of the Category column, select Accounts Receivable.
  6. Enter how much you want to refund in the Amount field.
  7. Fill out the other fields as you see fit, then click Save and close.

 

The steps of recording refunds will vary depending on whether you use QuickBooks Online or QuickBooks Payments. You can browse these articles to learn the different ways of processing a refund.

 

 

I've modified the steps from my previous post @vespinoza-gcinca. Please check again and get back to me if you have follow-up questions. Thank you and have a great day!

    V
    vespinoza-gcincaAuthor
    November 11, 2022

    Thank you for responding but, I cannot do the process you are suggesting. In accounting you're not supposed to do this because you need to record what is received. I already deposited the check, and my bank statement reflect the deposit. I should have called the customer and advised of the overpayment. They could have issued a new check with the correct amount. But, since it is after the fact I issued a refund, and this should have cleared the credit but, it has not. 

    DivinaMercy_N
    DivinaMercy_N
    November 11, 2022

    Thanks for getting back here, @vespinoza-gcinca. 

     

    I appreciate you giving us additional details about the process you've made in handling the customer's overpayment in QuickBooks Online (QBO). 

     

    My colleague already updated the recommendation provided above to help you fix the issue. I've also attached this helpful guide to serve as your reference in managing customers' overpayments in QBO: Handle a customer credit or overpayment in QuickBooks Online. 

     

    Don't hesitate to post again here if you have any other concerns about processing customer payments. I'm just a post away to lend a hand. Have a good one and keep safe. 

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