Issue Overpayment Refund in QuickBooks Desktop

Here are instructions to receive a customer overpayment then issue a check refund for the resulting credit balance using QuickBooks Desktop.

Note: This is not the same as creating a credit memo.

  1. Menu: Go to Customers>Receive Payments.
  2. Choose the customer in the “Received From” field.
  3. Fill in the Payment Amount.
  4. Be sure to choose an appropriate Date and method of payment.
  5. If there are any unpaid invoices, this list will show up here in the screen.
    1. Apply your overpayment to an open invoice here. Be sure the invoice you choose is check-marked.
    2. Remember, this customer overpaid you, so the invoice(s) you choose to apply payment against will leave this customer with a credit balance.
    3. Click Save & Close. If you get a warning message, just basically ignore and click on OK.
  6. Note: If there are no open invoices to apply your payment to, then there simply won’t be open invoices listed here. In this case, you can simply just click on Save & Close. If you get a warning message, just basically ignore and click on OK.
  7. Now, to issue a check refund to this customer for the overpayment amount:
    1. Go to your menu Banking>Write Checks.
    2. Choose the appropriate bank account.
    3. Choose the appropriate check number and date.
    4. Choose this same customer in the “Pay To The Order Of” field.
    5. Fill in the amount of the overpayment (credit balance) you wish to refund.
    6. Very Important: Choose the account called “Accounts Receivable” in the Expenses tab towards the bottom of the screen.
    7. Click Save & Close.
    8. Note: if you get a warning that states “Please choose a customer when using an Accounts Receivable account as a line item”, then choose this exact same customer in the field (within the same Expenses tab off towards the right side) called “Customer:Job”. If this field does not exist, then you may have to change a company preference setting.
  8. Now, if you look at this customer’s AR balance, this check refund should be reflected here. HOWEVER, you still need to apply this check refund to the overpayment credit; otherwise these two line items will always appear as open. To do this:
    1. Highlight the customer in the customer list, then click on “New Transaction” (at the top of the customer list, not in the company menu list) and choose, “Receive Payments”.
    2. Within the Receive Payment screen:
      1. DO NOT fill in a payment amount; instead just highlight (not checkmark) the outstanding check payment amount as listed in the open invoices list, then click on “Discounts & Credits” listed as one of the button items towards the top.
      2. Find the “Available Credit” which is the overpayment amount and be sure it is check marked, then click “Done”.
  • You will now notice there is a new column called “Credits” and thus the NET of the Amount Due + Credits is equal to zero.
  1. Click on Save & Close.
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