Overpayment of Vendor Bill – How to Handle in Quickbooks
By Greg Lam on April 25, 2012 in quickbooks, quickbooks tutorial and training with 7 CommentsYou overpaid a bill or bills that were sent to you by one of your vendors, so how do you handle this bill overpayment in QuickBooks?
The first step in QuickBooks is to overpay the bill and get a credit. The second step is to either get a refund from the vendor and enter it as a deposit or use the overpayment credit on a another bill you received from the vendor.
Step 1 – Overpay the bill(s)
- Go to Pay Bills (vendor > pay bills)
- Select the appropriate bill(s) that you overpaid (by putting a check mark next to the bill)
- In the Amt. to Pay column, add the overpayment amount to a bill that you will be paying
- Continue as usual and pay selected bills
What this overpayment will do is create a credit with the vendor that you can use when paying another bill.
Step 2 – Receive the credit as a refund
If you will not purchase anything further from the vendor,v you can request a refund. You have to physically contact the person yourself and get the company to give you a refund.
If you will use the credit to pay another bill, skip to step 3.
When / if you get the refund, this is what you do.
- Go to Record Deposits (banking > make deposits)
- For the Received From choose the vendor’s name and the From Account choose Accounts Payable
- Receive the payment
This effectively creates a bill from your vendor that you can then use your credit to pay off.
Step 3 – Pay another bill using the credit
To use the credit against a bill:
- Go to Pay Bills (vendor > pay bills)
- Select the appropriate bill(s) that you want to pay using the credit
- Below the bills click on the Credit button and use the credits (if you have credit left over, highlight another bill and repeat until either the credit is used up or the bills are all paid)
- Continue as usual and pay selected bills
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This post was written by Greg Lam. He's a small biz and tech guy who's trying to make financials easier to do and understand. He's also the co-founder of the Small Biz Doer.
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Quickbooks 2012 will not let you overpay a vendor.
Hi K. Kersey,
Are you able to give a bit more detail or send me a screen shot to greg at smallbusinessdoer.com? I have QuickBooks 2012 and I just tried to overpay a vendor and it worked just like the instructions I wrote above.
Yes, true it does. But my problem was that the amount was $334 in quickbooks and I saved the information but when I went to pay it through online banking I transposed the number to $343. I noticed the error when I went to do a bank reconciliation. When I went back into Quickbooks to updated witht he amount that I did pay it would not let me pay more than the amount that was originally owed.
Ok, gotchya. I think the simplest thing to do would be to delete your payment in QuickBooks. Go to "Write Checks", find the transaction, and delete it. You will now be able to repay (and overpay) the bill by going to "Pay Bills". Let me know if that works.
What about receiving the credit back to a credit card? This process you describe only works if the vendor refunds you with a check. Please advise. Thanks
Hi Jimmy,
If you're receiving a refund to your credit card, you still do step 1 by overpaying the bill. The second step is to go to "Enter Credit Card Charges" and make sure to use to select "Refund/Credit". For the account, use "Accounts Payable" and for the "Customer:Job", use the name of the vendor that you overpaid.
To double check you did it correctly, go to the vendor from "VendorS Center" and you'll should see that the credit is used up.
Thanks a lot your answers are very simple and easy to follow.