How can an invoice show as being paid and closed, but the Deposit screen shows that this invoice was paid and then refunded when I did not initiate any return?

Well, once an invoice is paid, it remains paid unless you remove the payment(s) that pay it.  Additional transactions added to the customer's account won't change that.

How is the refund entered?  Usually a refund is accomplished by recording a credit memo and then a refund check, which pays down the credit memo.

Let me cite some possible reasons why the invoice payment was refunded without any action taken by you to initiate a refund, @GetMath.

At times, a payment made by the customer may encounter issues, leading to an unintentional refund or a bounced payment. This could be due to a problem with the bank when the customer made the payment or because the customer disputed the payment, leading to a chargeback, where the money is returned to the payer.

I recommend checking with your bank to review any issues that may have caused the refund. You should also reach out to your customer to ask if they made any changes to the payment. Additionally, you can review your emails for any notifications regarding the payment issue.

If there are no concerns with your bank or customer, I recommend contacting our Live Support team for assistance. They will address your concerns and provide timely solutions. Here’s how to reach them:

1. Inside QuickBooks Online, navigate to the Menu button.
2. Select the Help option.
3. Choose the Ask QB assistant a question.
4. Enter "Contact Support" and click Contact a Human.
5. Follow the prompts, then choose a way to connect with us.

Once you've managed your deposits, make sure to categorize your transactions. It will help you accurately reflect your income and expenses on your financial statements, giving you a better understanding of your business's health.

Remember this thread for any future questions or assistance you need. Our Community forum is always here to help you with employee timesheet issues.