How to Record a Returned Payment in Quickbooks Online
In any business, there may be instances where a customer’s payment is returned due to insufficient funds, closed accounts, or other reasons. As a business owner, it is essential to accurately record these returned payments in your accounting system, such as Quickbooks Online. Here’s a step-by-step guide on how to record a returned payment in Quickbooks Online.
Step 1: Navigate to the Sales Tab
First, log in to your Quickbooks Online account and navigate to the Sales tab located on the left-hand side of the dashboard.
Step 2: Choose Customers
Click on the Customers option, which will open a list of all your customers.
Step 3: Locate the Customer
Locate the customer whose payment was returned and click on their name to open their profile.
Step 4: Open the Transaction
Scroll down to the Transaction List tab and find the payment that was returned. Click on the payment to open the transaction.
Step 5: Click on More
In the transaction window, click on the More button located at the bottom right corner.
Step 6: Select Void
From the drop-down menu, select Void. This action will void the original payment and create a new transaction for the returned payment.
Step 7: Enter Return Check or Payment
In the new transaction window, enter “Return Check” or “Return Payment” in the Payment No./Check No. field to indicate that this is a returned payment.
Step 8: Adjust the Amount
Adjust the amount to reflect the returned payment. If the entire payment was returned, enter the original payment amount as a negative value. If only a portion of the payment was returned, enter the returned amount as a negative value.
Step 9: Save the Transaction
Once you have entered all the necessary information, click on Save and Close to record the returned payment.
Step 10: Reconcile the Bank Account
To accurately reflect the returned payment in your bank account, you need to reconcile your bank account in Quickbooks Online. Go to the Banking tab, select the appropriate bank account, and click on the Reconcile button. Follow the on-screen instructions to reconcile the returned payment.
Step 11: Review Reports
After recording the returned payment, it is advisable to review reports such as the Accounts Receivable Aging Summary and the Customer Balance Detail to ensure that the customer’s account balance is updated correctly.
Common Questions and Answers:
1. What if the customer provides a replacement payment?
If the customer provides a replacement payment, record it as a new payment and follow the regular process of recording payments in Quickbooks Online.
2. Can I record a returned payment for an invoice that has already been closed?
Yes, you can record a returned payment for an invoice that has already been closed. Follow the steps mentioned above, and Quickbooks Online will automatically update the customer’s balance accordingly.
3. How do I handle fees associated with the returned payment?
If there are fees associated with the returned payment, record them as a separate expense transaction in Quickbooks Online. Categorize it under the appropriate expense account, such as “Bank Charges” or “Returned Payment Fees.”
4. What if the customer disputes the returned payment?
If the customer disputes the returned payment, it is advisable to follow up with them directly to resolve the issue. Depending on the outcome, you may need to make adjustments to the recorded returned payment.
5. Can I apply the returned payment to a different invoice?
Yes, you can apply the returned payment to a different invoice by following the same steps mentioned above. Simply open the transaction and adjust the amount to reflect the new allocation.
6. How can I keep track of all returned payments?
To keep track of all returned payments, you can run a report in Quickbooks Online called “Payment Received” and filter it to show only voided transactions. This report will provide a comprehensive overview of all returned payments.
7. What if the returned payment is from a sales receipt rather than an invoice?
The process of recording a returned payment from a sales receipt is the same as recording it for an invoice. Simply locate the sales receipt transaction, void it, and create a new transaction for the returned payment.
8. Can I record a returned payment for a credit memo?
If a customer’s payment was applied to a credit memo, you can reverse the credit memo by creating a new credit memo or a negative invoice. This will effectively record the returned payment and update the customer’s balance.
9. How do I handle returned payments from multiple invoices?
If a returned payment is associated with multiple invoices, you can allocate the returned amount across those invoices by adjusting the payment amount for each invoice accordingly.
10. Can I record a returned payment for a customer who is no longer active?
Yes, you can still record a returned payment for a customer who is no longer active in Quickbooks Online. Simply follow the steps mentioned above, and Quickbooks Online will update their outstanding balance accordingly.
11. Should I notify the customer about the returned payment?
It is generally a good practice to notify the customer about the returned payment. This helps in resolving any potential issues and ensures transparency in your business dealings.
Recording a returned payment accurately in Quickbooks Online is crucial for maintaining the integrity of your financial records. By following the steps outlined in this guide, you can ensure that your books are up-to-date and reflect any returned payments appropriately.