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+1-802-778-9005If your organization processes refunds for credit card purchases, it is quite possible that you may face a scenario where a payment’s “Deposit” is negative.
At times, negative value transactions show up in Undeposited Funds and appear on the Bank Deposit screen (for instance, if you issue a customer refund from Undeposited Funds). You can’t deposit a negative value entry by itself. The net deposit must be a value greater than or equal to zero. To resolve issues with negative transactions in Undeposited Funds, make a zero-value deposit and record the negative-value deposit with it.
QuickBooks does not natively support negative deposits and doesn’t allow you to enter a negative amount on a Bill. Therefore, if you receive a correction for service, you need to record it as a separate transaction. Once done, you can apply it to the Bill. It’s a very simple way to ensure your records are accurate and up-to-date in QuickBooks.
Since the refund is larger than the amount in your undeposited account, you may need to create a Journal Entry in QuickBooks Desktop for Windows or Mac to offset the Undeposited Funds.
To record negative credit card batch transactions in QuickBooks Desktop, go to Company, select Make General Journal Entries, adjust the date, and enter the necessary details to offset Undeposited Funds.
Let’s see how:
Step 1: Navigate to Company
Hover over the Company at the top menu bar.
Step 2: Select Make General Journal Entries
Choose to Make General Journal Entries.
Step 3: Fill out the Date column
Edit the DATE.
Step 4: Finishing up
Type all the necessary details.
QuickBooks Desktop (QBDT) won’t allow a negative total amount when recording transactions manually. However, you can use the Batch Enter Transactions option to enter negative amounts for credit card charges or credits.
To record negative deposits using Batch Enter Transactions in QuickBooks Desktop, go to Accountant, select Batch Enter Transactions, choose Checks, enter date, number, payee, and credit card details, and input the amount as positive. This will decrease both bank and credit card balances.
Below are the steps you must follow:
Step 1: Go for Batch Enter Transactions
Head to the Accountant menu and then choose the Batch Enter Transactions option.
Step 2: Select Checks as the Transaction Type
Select Checks as the Transaction Type and then click on a Bank Account.
Step 3: Enter the Date, Number, and Payee
Type the Date, Number, and Payee.
Step 4: Add the credit card
Choose the credit card as the affected account.
Step 5: Finishing up
Enter the amount as positive.
Note: This process will decrease both bank and credit card balances.
Record credit card charges in QuickBooks Desktop, go to Banking, select Make Deposits, choose your Deposit To account and date, click Payments, review transactions, add the charge, and save.
Following the step-by-step information below:
Step 1: Navigate to Banking
Hover over the Banking at the top menu bar.
Step 2: Select Make Deposits
Click on Make Deposits.
Step 3: Add your Deposit To account
Select your Deposit To account, then enter the correct Date.
Step 4: Click Payments
Hit the Payments icon.
Step 5: Check the transactions used to pay the refund
Once done, a new window will pop up with the transactions under the Undeposited Funds. You need to review the transactions that were used to pay the refund for that day. Then, press OK.
Step 6: Create another line for the charge
Create another line for the charge that was made to your bank account with the Credit Card Processor.
Step 7: Finishing up
Enter all the necessary details. Then, hit the Save & Close tabs.
How to record negative entries from Undeposited Funds in QuickBooks Online, create a Journal Entry with the Undeposited Funds and bank accounts, enter amounts in debit and credit columns, then save. Next, use Bank Deposit to offset the negative value, ensuring the total is zero.
Create a Journal Entry, click + New, select Journal Entry, enter the date, choose Undeposited Funds in the Debit column, select the bank account for the Credit column, then save and close.
Step 1: Select Journal Entry
Click + New and then choose Journal Entry under Other.
Step 2: Type the transaction date
Write down the transaction date in the Journal date field.
Step 3: Add the Undeposited Funds Account
On the first line, select the Undeposited Funds account from the Account column.
Step 4: Enter the single-line deposit amount
Under the Debit column, type the single-line deposit amount.
Step 5: Opt for the bank account
Click on the bank account in the Account column on the second line.
Step 6: Re-enter the single-line deposit amount
In the Credit column, re-enter the single-line deposit amount (if it does not already display).
Step 7: Finishing up
Press the Save and Close buttons.
To offset the negative value, click + New, select Bank Deposit, add the payment and the Journal Entry ensuring the total is zero, then save and close.
Step 1: Select Bank Deposit
Click + New and then choose Bank Deposit under Other.
Step 2: Add the payment and the Journal Entry
Select the payment and the Journal Entry you created. Make sure the total amount must be zero.
Step 3: Finishing up
Hit the Save and Close tabs.
Record a negative deposit in QuickBooks Online, create a Journal Entry, set Undeposited Funds for Debits and a bank account for Credits, ensuring the amounts match the negative balance. Save and close.
You can choose your undeposited funds and bank account as the source account of your journal entry to zero out the negative balance.
Here’s how:
Step 1: Select Journal Entry
Navigate to the + New tab and then choose Journal Entry under OTHER.
Step 2: Enter the date of your Journal Entry
Input the date of your journal entry.
Step 3: Add Undeposited Funds
On the first line, select Undeposited Funds from the ACCOUNT column.
Step 4: Type the amount equal to the negative balance
Under the DEBITS column, enter the amount equal to the negative balance.
Step 5: Opt for any Bank Account
Choose any of your bank accounts on the second line from the ACCOUNT column.
Step 6: Write down the same account
Type the same amount under the CREDITS column.
Step 7: Finishing up
Press the Save and Close buttons.
How to Deposit the journal entry to offset the negative credit card balance, click + New, select Bank Deposit, choose the journal entry created, and then hit Save and Close.
Step 1: Go for Bank Deposit
Click + New button and then select Bank deposit under OTHER.
Step 2: Select the Journal Entry
Under the Select the payments included in this deposit section, choose the journal entry you’ve created.
Step 3: Finishing up
Hit the Save and Close icons.
You can write a check or create an expense transaction to record the money you take away or withdraw from your bank account.
To record money withdrawn from your bank account, click + New and select Check or Expense. Choose the bank account, enter details for the withdrawal amount, fees, and client payment, then save and close.
Below are the steps you’ve to follow:
Step 1: Select Check/Expense
Hit the + New icon and then choose either Check or Expense.
Step 2: Navigate to the account where the transactions are posted
Select the account where the transactions are posted from the Bank Account drop-down.
Step 3: Enter the following information
In the Category detail section, type the following:
Step 4: Finishing up
Press the Save and Close buttons.
If you run into a scenario in which you actually have a negative deposit (a banking debit/withdrawal from your account) by your merchant services processor, you need to move the expected deposit from the Undeposited Funds account to your Bank Account via a journal entry.
This may happen in the event you have a large credit card refund that exceeds your new credit card sales on a particular day. Thus, you are required to match your downloaded payments with your QuickBooks transactions to resolve negative credit card deposits.
About the refund, record it as Check or Expense by do the following:
Step 1: Select Expense/Check
Navigate to + New and then choose Expense or Check.
Step 2: Add the Customer
Select the customer you want to refund from the Payee drop-down menu.
Step 3: Navigate to the Bank account
Under the Payment account drop-down, click on the bank account where you deposited the overpayment to.
Step 4: Opt for Account Receivables
Choose Accounts Receivable on the first line of the Category column.
Step 5: Enter how much amount you want to refund
Write the amount how much you want to refund in the Amount field.
Step 6: Finishing up
Fill out the other fields as you see fit, then press the Save and Close tabs.
After this, link the refund to your customer’s credit or overpayment.
Adhere to these steps:
Step 1: Go for Receive Payment
Hover over + New and then select Receive payment.
Step 2: Add the same customer you used for the Check/ Expense
Choose the same customer you used for the check or expense when recording the refund.
Step 3: Mark the Expense or Check checkbox you created
In the Outstanding Transaction section, tick mark the checkbox for the Expense or Check you created when recording the refund.
Step 4: Match the payment to the open balance
Make sure the payment is equal to the open balance.
Step 5: Finishing up
Hit the Save and Close icons.
In QuickBooks, when your bank balance shows negative, it’s usually a result of making payments or processing checks that contain a larger amount than the money you have in your checking account. In this case, you have to generate a report so that you can track all transactions associated with your financial institution.
If you have a large credit card refund that exceeds your new credit card sales on a particular day or if you have a negative deposit by your merchant services procssor, you’re recommended to move the expected deposits from the Undeposited Funds account to the appropriate bank account via Journal Entry. Then, group it with the payments to create a $0 deposit and remove the payment from the Undeposited Funds account.
