How to Reverse a Payment in QuickBooks

To reverse a payment in QuickBooks, open the customer payment, unapply it from any linked invoice, and then void or delete the record to keep your books accurate. This process ensures your accounts receivable stays correct while preserving an audit trail. If the payment was valid but entered incorrectly, you can re-enter it with the right details.

Identify the Payment That Needs Reversing

The first step is to locate the payment you need to reverse. This ensures you don’t accidentally modify the wrong transaction.

• Go to Sales (QuickBooks Online) or Customers (QuickBooks Desktop).
• Select All Sales or the specific customer.
• Use filters such as date, customer name, or payment method to quickly find the payment.

Example: If a $500 payment was applied to the wrong invoice, search under that customer’s history to locate the payment.

Open the Payment Transaction

Once you locate the transaction:

• Click the Payment link to open the detailed transaction window.
• Review the payment details such as customer, amount, and invoice applied.

Confirm that this is the payment you intend to reverse before moving forward.

Unapply the Payment From the Invoice

If the payment is linked to an invoice, you’ll first need to unapply it.

• In the payment window, uncheck the box next to the invoice it was applied to.
• Save and close the transaction.

This will free up the invoice so it appears as unpaid again, while keeping the payment record intact.

Reverse or Delete the Payment Record

Now you can actually reverse the payment:

• In QuickBooks Online, select More at the bottom of the payment screen and click Delete or Void.
• In QuickBooks Desktop, choose Edit > Delete Payment or Void Payment.

Tip:

• Void keeps the transaction record but sets the amount to $0, maintaining a clear trail.
• Delete completely removes the record.

Re-Enter the Correct Payment (if applicable)

If the customer did make a valid payment but it was applied incorrectly, you’ll need to re-enter it.

• Go to + New > Receive Payment (QuickBooks Online) or Customers > Receive Payments (QuickBooks Desktop).
• Enter the correct details:
  
  • Payment method (cash, check, ACH, credit card)
  • Payment amount
  • Invoice(s) it should apply to
  • Deposit account

Example Walkthrough

Let’s say a customer pays $1,200, but you accidentally apply it to Invoice A instead of Invoice B.

1. Locate the $1,200 payment.
2. Open the payment transaction.
3. Unapply it from Invoice A.
4. Void the payment.
5. Re-enter the $1,200 payment and apply it correctly to Invoice B.

This way, your records remain accurate without creating discrepancies in accounts receivable.

Bonus Tip: Use DepositFix + QuickBooks for Cleaner Payment Tracking

If you’re using QuickBooks to manage payments, consider integrating it with DepositFix. DepositFix automatically syncs customer payments, invoices, and receipts with QuickBooks, reducing the chances of misapplied payments. It even allows you to transfer credit card fees to customers, so your business doesn’t carry the extra cost.