How to Fix an Incorrect Payment in QuickBooks Online

By maintaining the accuracy of your QuickBooks Online software, you can make tax time a breeze. The fear of making a tax return mistake and receiving an IRS letter is a common concern.

Inaccurate payments can also cause a host of problems within the QBO network. This article is specifically crafted to assist our readers in managing these types of errors effectively.

Different Scenarios

When a customer pays an invoice, the payment is applied towards the invoice in QBO. This is a fairly simple transaction, but if entered wrong, it results in an unhappy customer.

An incorrectly entered payment could occur in a couple of different ways.

Payment Entered for Wrong Customer - Deposit Not Yet Done

This scenario is the easiest to fix because invoice payments that have not been deposited require fewer steps to correct.

1. Open a new Receive Payment (+ New → Receive payment).
   
2. In the top left-hand corner, next to the words Receive Payment, click on the clock icon.
   
3. This dropdown includes recent payments entered. Locate the payment in question and click on it.
   
4. In the customer section, use the dropdown menu to select the correct customer's name.
5. Enter the payment amount and select the correct invoice.
6. Click "Save and close".
7. Although you selected the invoice in step 5, you must now apply the payment to the invoice. This is easiest to do through the customer screen.
8. Open the Customers tab and click on "View/Edit" to the right of the payment you just updated.
9. Select the invoice and make sure the dollar amount is correct.
10. Click "Save and close".

Payment Entered for Wrong Customer - Deposit Matched

You may have invoices for multiple customers for the same amount. If the payment is applied to the wrong customer and invoice, you will ask for payment from the wrong customer.

To fix a payment that has already been deposited, do the following:

1. Open the "Bank Transactions" screen.
   
   
   
   
2. Choose the account the money was deposited in.
3. In the middle of the screen, you will see 3 sections that say "For Review," "Categorized," and "Excluded." Choose the section entitled "Categorized."
   
   
   
   
4. Locate the deposit in question and choose Undo in the "Action" column to the right of the transaction.
5. Next, follow the steps listed above for "Payment entered for wrong customer - Deposit not yet done."
6. Once complete, return to the "Bank Transactions" screen and locate the deposit. Choose the "Match" button and check off all of the payments for the deposit.
7. Click "Match."

Other Issues

If the deposit has already been reconciled, you will need to undo the reconciliation by doing the following:

• Click on the gear icon in the top right-hand corner and choose "Reconcile" from the drop-down menu.
  
• Click on "History by account".
• Ensure you have the correct account selected.
• Choose the date of the last reconciliation, and in the far right column under "Action," use the drop-down next to "View Report" and choose Undo.
• Click "Yes" and then Undo.

Complete the steps above and then do the reconciliation again.

Although there are several ways to perform these functions in QBO, this is the most direct and easy process for the change.

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