When a customer refund is issued and not repaid, you need to record it properly in QuickBooks Online (QBO) without breaking reconciliation. Here’s how to do it.

Scenario

• A client payment was part of a bulk deposit.

• A refund was issued for part or all of that payment.

• No re-payment was made by the client.

Step 1: Keep the Original Deposit Intact

• Do not remove the refund from the reconciled deposit.

• This keeps reconciliation and bank records accurate.

Step 2: Record the Refund Receipt

1. In QBO, go to + New > Refund Receipt.

2. Select the customer.

3. Enter the refund date (same date it cleared in the bank).

4. Choose the bank account the refund came from.

5. Use the same product/service or income account originally used.

6. Save.

Step 3: Match to Bank Feed

1. In QBO, go to Banking.

2. Find the refund transaction in the bank feed.

3. QBO should auto-match it to your Refund Receipt.

4. Click Match.

Why This Works

• Keeps reconciled deposits untouched.

• Clearly records the refund in both income and bank activity.

• Maintains an accurate audit trail.

Alternative (If Refund Not Sent Yet)

• Create a Credit Memo instead of a Refund Receipt.

• Apply it later to a future invoice or convert to a refund when processed.

Tip

Use Docket’s Payments Report or your processor report to confirm exact refund amounts. Always confirm QBO, processor, and bank records match.