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lbisesi
June 11, 2024
Question

Can't make sense of when to issue a credit and when to issue refund

  • June 11, 2024
  • 1 reply
  • 0 views

I like to think I'm fairly smart.  Have worked for years in Quickbooks desktop versions.  However, this QBO version has me stumped.  Scenario....customer paid 5 invoices via Quickbooks payments (credit card).  A week later I received a payment via ACH for one of those same invoices.  Our checking account is not set up to initiate ACH payments so easier to issue refund for that invoice via Quickbooks payments on their credit card.  I went into Intuit merchant payment center and issued the refund but now need to "clean it up" and it all inside the customer file.  I have tried multiple things (issued CM, issued Refund Sales Receipt, etc.) but now I'm stuck with a credit balance on the account and an "unapplied payment" of that same amount.  HELP!

1 reply

J
JanbonN
June 11, 2024

We can create a check transaction to clear the credit balance and unapplied payment, @lbisesi. I'm here to walk you through the steps.

 

To differentiate the two, a credit memo records a decrease in the customer's outstanding balance, while a refund involves returning the money to the customer due to overpayment, returned items, or any other circumstances similar to this.

 

Let's now clear the balances:

 

  1. Go to +New and choose Check.
  2. Choose a Payee in the dropdown.
  3. In the Category details section, choose Accounts Receivable (A/R) for the CATEGORY.
  4. Fill in the combined credit balance and unapplied payment under AMOUNT.

 

Then, link the check transaction with the credit balance and unapplied payment using the receive payment feature.

 

Additionally, you can refer to this article about personalizing your invoices in QuickBooks: Customize invoices, estimates, and sales receipts in QuickBooks Online.

 

Please return to this thread if you have other concerns about credit balance and refund. We're here to help you.

L
lbisesiAuthor
June 17, 2024

Ok, thanks.  This cleared up this one.  But here's my ongoing issue....In addition to Intuit Merchant Payments, we also use another 3rd party merchant payment vendor.  Often times I have to issue a refund through that vendor.  When the net deposit shows up in QBO (sometimes it is a negative amount if no other funds were collected on that same day), how do I handle the refund in QBO?  Do I issue a refund receipt?  If so, how do I match it up?

G
GenmarieM
June 17, 2024

I have a solution that can help you in obtaining that information, lbisesi.

 

Handling a customer refund in QuickBooks Online will be based on various scenarios. Let me walk you through the process of recording a refund.

 

If the invoice has been paid, here's how:

 

  1. Record a credit memo by selecting +New and clicking Credit memo.

  2. Choose your customer and fill out important information.
  3. Select Save and close.

  4. Make the refund by clicking the +New and Expense.

  5. Under the payee, choose a customer.
  6. In the Payment account field, select the bank the money is being refunded from.
  7. Select Debtors account (Accounts Receivable) in the Category field.
  8. Fill out the necessary information, then click Save.

  9. Next, go to +New and click Receive payment.

  10. Fill out important information.
  11. The Balance should be 0 as they will cancel each other out.
  12. Once done, click Save and close.

 

Now, go to Transactions and click Bank Transactions to match the record you found.

 

For other scenarios in handling a customer refund, you can refer to this article for the detailed steps: Record a customer refund in QuickBooks Online.

 

If the scenario above doesn't match your situation, you can consider excluding the transaction. Then, manually record the refund using the refund receipt and add a memo for the vendor.

 

If you encounter any difficulties in handling your customer refund, please don't hesitate to let me know by leaving a comment below. I'm available and prepared to help you whenever you need it.

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