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SamanthaSB
October 12, 2021
Question

Recording Returned Payments

  • October 12, 2021
  • 1 reply
  • 0 views

Greetings, 

 

As the subject line says I'm looking for feedback in regards to returned payments made. In this case the payment was sent to the wrong account number and the bank reversed the payment. There was also a wire fee charged and the returned amount was the difference. 

 

Thank you in advance! 

1 reply

R
Rea_M
October 12, 2021

Recording returned payments in QuickBooks Online (QBO) is easy, and I'm here to guide you on how, @SamanthaSB.

 

You can either record returned customer payments using an expense or a journal entry. Any of the processes can get tricky, so I'd recommend consulting your accountant to help you handle the next steps and keep your financial data accurate.

 

If you opt to use an expense to record a customer's returned payments, follow these steps:

 

  1. Enter the bounced check/returned payment as an expense.

  2. Unapply the bounced check/returned payment from the original invoice.

  3. Create an item for fees (wire fee charged) from your bank.

  4. Enter the service fee the bank charged you.

  5. Create an invoice for the bounced check fees to send to your customer.

  6. Send a statement to your customer.

 

After you forward the statement to your customer, they know what they owe and why. Then, once they pay you for the original invoice and the bank fees, you can follow the normal steps to receive their payment. 

 

For the step-by-step guide, you can refer to this article: Record a returned payment using an expense.

 

If you want to use a journal entry to record a customer's returned payments, please check out this article for the detailed steps: Record a returned customer payment using a journal entry.

 

Then, in case the returned payment was made by your customer via bank transfer, you can handle this situation to keep your books in order by following the steps in this article: Handle a rejected or failed bank transfer payment.

 

Also, QuickBooks provides a variety of reports to get the information you need for your business (i.e., customer and sales reports). You can pull up one, then customize it to focus on specific accounts or filter for certain things.

 

Please keep me posted on how it goes. Let me know in the comments if you have other concerns about recording returned payments in QBO. I'm always around to help. Take care and stay safe always, @SamanthaSB.

S
SamanthaSBAuthor
October 13, 2021

In my situation the payment was issued to a vendor.  I was given the wrong account information, and the payment I attempted was reversed. Is the process still the same in this case?

M
mv32
October 13, 2021

I can help you record the returned payment, @SamanthaSB.

 

When you enter a returned payment for a business expense or canceled project, you can record the fund by linking a bank deposit to a vendor credit. If you have created a bill, make sure that you added the bill and paid it properly. This way, you can have accurate vendor expenses and credits.

 

Once done, you can enter a vendor credit to ensure that the credit hits the expense account you use for that vendor. Let me show you how:

 

  1. Click the + New button and then select Vendor credit.
  2. In the Vendor drop-down, pick the vendor.
  3. Enter the category, product, or service that valued the returned payments.
  4. Click Save and close.

 

Then, you'll have to deposit the money you got from the refund back to the account you use for the payment:

 

  1. Click the + New button.
  2. Select Bank Deposit.
  3. In the Account drop-down, choose the account where you want to deposit the money.
  4. Go to the Add funds to this deposit section and select the vendor who gave you the refund. Also, add the wire fee charged (amount is in minus to negate the total returned payments).
  5. Choose Accounts Payable from the Accounts column.
  6. Enter the amount of your refund.

     
  7. Click Save and close.

 

Lastly, link the bank deposit to the vendor credit using the Pay Bills option:

 

  1. Click the + New button.
  2. Choose Pay Bills.
  3. Select the bank deposit you just created. (The amount of the vendor credit will show in the Credit Applied field, and the Total payment should be $0.00.)

     
  4. To complete the process, click Save and close.

 

I've also included additional information about handling vendor credits and refunds in QuickBooks Online: Manage vendor credits.

 

If you have recorded expense transactions in error, you can edit or delete them anytime.

 

That's it! In case you have additional follow-up concerns or clarifications, please let us know so we can assist you. We're always here to give you a hand. Have a nice day ahead!

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