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csoffice 11
November 10, 2022
Question

Vendor overpayment with credits and refund

  • November 10, 2022
  • 1 reply
  • 0 views

I have a rather complicated question regarding an overpayment to a vendor.

 

Last week we went into one of our vendors to pay our balance with a credit card. We paid 9 invoices for a total of $43,227.08. The person who paid went to the front cashier desk, told them the amount we were paying and they ran the card.

 

A couple of days later, their bookkeeper called to say we had an overpayment of $17,799.38 and that they were issuing a store credit. After a few hours of research, we realized that we had accidentally entered 3 "Order Confirmations" in QB as invoices. The total of those 3 orders was $17,799.38.

Because they weren’t actually invoices, the vendor recorded that as an overpayment.

 

Here are the things I don't know how to handle:

 

 1. Normally, I would just void the order confirmations we accidentally entered and re-enter them once they are flipped to an invoice but they’ve been applied to a credit card payment and are marked as paid. Also, when the orders are finally flipped to an invoice, the totals won’t be the same. I’m not sure how to handle this.

 

2. When we called the vendor back the next day to explain the situation, we asked if they could send us a check instead of issuing store credits and they agreed to do so. Unfortunately, their system is set up so that any new invoices are automatically applied to an existing credit balance and we had 4 new invoices entered that day which brought the credit balance down to $2646.29 which is the amount of the refund check.  

3. The credit card payment we have in QB shows payments for the 3 "Order Confirmations" but that is not actually correct and I don't know how to fix it.

 

I’m at a loss as to how to record the credits, the refund and the get rid of the "Order Confirmations" (which never should have been entered at all) and to correct the credit card payment.

 

We are a contractor so everything needs to be tagged to a specific job with correct amounts.  

I know how to apply credits under normal circumstances but this has gotten so convoluted that I don’t know what to do.

 

I hope I have explained this clearly; if not feel free to ask me a question.

 

I’ve spend all day trying to figure out how to get this straight and my head is spinning.

 

I’m using QB Desktop Premier Plus Contractor Edition 2022.

 

1 reply

R
RCV
November 10, 2022

Let me help you record the vendor overpayment with credits and refund in QuickBooks Desktop, csoffice.

 

There are different scenarios for recording refunds you received from a vendor. If the vendor sends you a refund check for a bill that is already paid, we can follow the steps below:

 

First, record a Deposit of the vendor check:

 

  1. Go to the Banking menu, then select Make Deposits.
  2. If the Payments to Deposit window appears, press OK.
  3. In the Make Deposits window, choose Received from the drop-down and select the vendor who sent you the refund.
  4. In the From Account drop-down, select the appropriate Accounts Payable account.
  5. In the Amount column, enter the actual amount of the Vendor check.
  6. Press Save & Close.

 

Then, record a Bill Credit for the refunded amount:

 

  1. From the Vendors menu, select Enter Bills.
  2. Tap the Credit radio button to account for the return of goods.
  3. Enter the Vendor name.
  4. Choose the Expenses tab and enter the Accounts on the original bill.
  5. In the Amount column, enter the appropriate amount for each Account (the amounts may have to be prorated).
  6. Press Save and Close.

 

Once done, we can link the deposit to the Bill Credit by following the steps below: 

 

  1. From the Vendors menu, select Pay Bills.
  2. Check the Deposit that matches the Vendor check amount.
  3. Tap Set Credits and apply the Bill Credit you created earlier then select Done.
  4. Select Pay Selected Bills, then press Done.

 

If the vendor sends you the refund as a credit card credit, we can perform the steps below:

 

  1. Go to the Banking menu, then select Enter Credit Card Charges.
  2. From the Credit Card drop-down, choose the credit card account.
  3. Tap the Refund/Credit radio button.
  4. Choose the appropriate Vendor name and enter the Date, Ref No, and Amount.
  5. Enter an appropriate memo to describe the transaction.
  6. If you returned Items, select the Item tab and enter the Items and Amounts from the refund.
  7. If the refund does not have Items, select the Expenses tab, select the appropriate Accounts and enter the Amount.
  8. Press Save & Close.

 

Here's an article you can refer to for more details about recording a vendor refund in QuickBooks Desktop. You can also consult your accountant on other options for handling vendor refunds in QuickBooks. 

 

Additionally, to further guide you in managing your vendor credits and other expense transactions in QBDT, I'd recommend checking out this article: Accounts Payable workflows in QuickBooks Desktop. 

 

Let me know in the comments below if you have any other questions. I'm always around to help. Take care and have a great day.

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