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How to Correct a Vendor Overpayment in QuickBooks

How do I handle an overpayment?  The owner of the company charged items on the company credit card.  His secretary accidentally submitted the receipts as expenses due to him.  Subsequently he received a check that was not due to him.  He has a new expense report that he submitted for reimbursement but since he was over paid, he will not get reimbursed.  How would this be handled in QuickBooks?
Go to Vendors > Enter Bills, select the Credit radio button at the top right above the vendor name, and enter in all the expense accounts you accidentally paid him for.  This will create a credit on his account, which you can use against his new expenses. 

Enter the bill for the next expenses in Vendors > Enter Bills like you normally do.  Then go to Vendors > Pay Bills and select the bill for the new expenses.  You should get a message telling you that the vendor has a credit, if not click the Set Credits button to apply the credit for the overpayment to the new bill.  If the new expenses are higher than the credit, you can pay the remainder due like you normally would.


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This article is provided for informational purposes and is not intended to be construed as legal, accounting, or other professional advice. For further information, please consult appropriate professional advice from your attorney and certified public accountant.

Ruth Perryman - QuickBooks Specialist Written by +Ruth Perryman

Ruth is the an Intuit Premier Reseller that offers great deals on QuickBooks POS and QuickBooks Enterprise. She has provided expert QuickBooks help to thousands of businesses all over the world since 1996.

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4 Responses to How to Correct a Vendor Overpayment in QuickBooks

  • Denis says:

    Ruth: That is so helpful! Thanks sincerely for your time.

  • Denis says:

    I accidentally overpaid a vendor’s bill when I transposed some numbers. When the transaction was later posted, I changed the amount in the right-most column to the amount that was actually paid, thus creating a credit in our favour.

    The following month when we received another bill from that vendor, I reduced the payment by the amount of the credit and again changed the right-hand column to show the exact amount on the cheque. This would have eliminated the credit.

    While the first bill disappeared from the QB billings, as it should, the second bill remains, with an outstanding balance equal to the shortfall I purposely created.

    So how do I resolve this? There should be a zero balance.