How can I apply a customer refund to another customer?

2 customers. One paid for the other. The refund check needs to go to the second customer but when I change the check name to the second customer, it doesn't apply the refund to the original customer. 

Any way to get around that?


Hello there, heather.

I'm here to help and guide you with applying the refund check, so let's get this started.

For you to apply the refund check from one customer to another customer, you'll need to create a journal entry in QuickBooks Desktop. Before doing so, let's set up a clearing account for you to use to move money from one account to another account since you can't move the money directly. 

To set up a clearing account, please follow these steps:

  1. Go to Lists and choose Chart of Accounts.
  2. Click on the Account drop down and select New.
  3. Choose Bank as the account type and click on Continue.
  4. In the Account Name field, enter Clearing Account. Please don't enter an opening balance.
  5. Click on Save & Close.

To use a clearing account:

  1. Create a journal entry.
  2. Add the Accounts Receivable (AR) from which you're moving money.
  3. Add the Clearing Account.
  4. Save the Journal Entry.
  5. Create a second journal entry.
  6. Add the Clearing Account.
  7. Add the AR to which you're moving money.
  8. In the Receive Payments, link the journal entry by clicking the Discounts And Credits button. Then, place a check mark beside the credit transaction and click on Done

I've got an article for you to learn more about recording a journal entry in QuickBooks Desktop: Record a journal entry.

That'll do it. You'll be able to apply the refund amount from one customer to another customer in QuickBooks Desktop. 

Please let me know if you have further questions and I'll be here to help. Have a wonderful day.

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