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.
- Menu: Go to Customers>Receive Payments.
- Choose the customer in the “Received From” field.
- Fill in the Payment Amount.
- Be sure to choose an appropriate Date and method of payment.
- If there are any unpaid invoices, this list will show up here in the screen.
- Apply your overpayment to an open invoice here. Be sure the invoice you choose is check-marked.
- Remember, this customer overpaid you, so the invoice(s) you choose to apply payment against will leave this customer with a credit balance.
- Click Save & Close. If you get a warning message, just basically ignore and click on OK.
- 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.
- Now, to issue a check refund to this customer for the overpayment amount:
- Go to your menu Banking>Write Checks.
- Choose the appropriate bank account.
- Choose the appropriate check number and date.
- Choose this same customer in the “Pay To The Order Of” field.
- Fill in the amount of the overpayment (credit balance) you wish to refund.
- Very Important: Choose the account called “Accounts Receivable” in the Expenses tab towards the bottom of the screen.
- Click Save & Close.
- 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.
- 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:
- 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”.
- Within the Receive Payment screen:
- 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.
- 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.
- Click on Save & Close.