Refunding Prepayments to Clients

If you are using Prepayments in the system and have a situation where a client terminates and you need to refund some of their prepaid balance to them, it is done simple with the following steps.

1. Determine the amount you owe the client. You can use the Prepayments Screen in the Home Watch Invoicing App to help you determine this balance.
2. Enter a Credit Memo for the remaining balance. In order to zero the amounts and balance, you need to enter in a Credit Memo to reverse the balance. In this example, we have 5 remaining visits at $70 that we are going to refund the client. In QuickBooks, hit the “+” key and then select Credit Memo. Fill out the Credit Memo like in this screenshot, picking “Customer Prepayments” as the Service Code, the quantity and rate based on what you charged the client:

3-Last, you can issue the client a check. Cut the check as you usually would – either via online banking or physical check, and enter it like you normally would except select Accounts Receivable as the category for the check. This is a special notation in QuickBooks so that the check will be applied to a customer account and will show when you view the Customer’s details. An example of the check entry is as follows:

4-At this point, you will see both the Credit Memo and the Refund Check on the Customer’s account screen:

As a result you would want to apply the check to the credit memo to zero both out. This is easily done by going into Receive Payments (Click the + and then Receive Payments). Don’t enter any amount (since the check and credit memo are the same amounts they equal zero when applied), make sure the check and the credit memo are selected and then press Save.