QB Issue Resolution:

A lot of similar questions are incorrectly answered or incomplete.

Step 1: You notice your customer has a negative balance from either overpaying or a credit memo.

Step 2: When returning the money to your client, DO NOT go (+) Cheque in QBO.  Instead, select Refund Receipt under (+) Customers. Fill in the details for the payment to your client, select the Product/Service that matches the invoice that was overpaid / credit memo you gave, OR create a new product and service called Refunds.  This will credit the selected bank account and allow you to print as a cheque.

Step 3: (+) Create Invoice for that client with the exact same details as the refund receipt – date, account, etc.

Step 4: (+) Receive Payment for that client.  Select the new invoice and the Refund Receipt will appear as an  un-applied payment in credits. Balance of cash should be zero for the payment.  This provides the correct journal entries, and clears all the A/R sub-ledgers for the client.  Client balance should be zero.

Resolution for Issue 'How do I clear open refund receipt balance?' available: Yes (Solved).
Source: Intuit Community forum.

How do I clear open refund receipt balance?: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.

Support for Credit Memo
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Error Recovery for Credit Memo [Canada]
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