Reconcile Refunds and Re-Payments in QuickBooks Online (QBO)

Sometimes a customer gets a refund, then later repays by check or another method. If the original refund was part of a bulk deposit, removing it can break reconciliation. Here’s how to handle it correctly.

Scenario

• Original bulk deposit includes the customer payment.
• Customer receives a refund that was part of that deposit.
• Customer later repays by check.

Step 1: Leave the Original Deposit Alone

• Do not remove the refund from the reconciled deposit.
• Removing it will un-reconcile your books.

Step 2: Record the Refund

1. In QBO, go to + New > Refund Receipt.
2. Select the customer.
3. Enter the date of the original deposit (if netted).
4. Use the same income or payment account originally used.
5. Save.

Step 3: Record the Re-Payment

1. In QBO, go to + New > Receive Payment.
2. Select the customer.
3. Apply it to the open invoice.
4. For Deposit To, select Undeposited Funds.
5. Save.

Step 4: Deposit the New Payment

1. In QBO, go to + New > Bank Deposit.
2. Select the check payment.
3. Choose the correct bank account.
4. Save.

Why This Method Works

• Keeps the original reconciled deposit intact.
• Tracks both the refund and repayment cleanly.
• Maintains a proper audit trail.

Alternatives (Not Recommended)

• Removing the payment from the deposit → unreconciled books.
• Credit Memos → only for store credit.
• Journal Entries → only with an accountant’s help.

Tip

Use Docket’s Payments Report to confirm which payments were in each deposit. This makes refunds and repayments easier to match.