You reverse a vendor payment in QuickBooks Online either by voiding/deleting the bill payment, or by recording a refund/returned payment and re-opening the bill. The exact steps depend on whether real money moved and whether the vendor actually refunded you.
- Decide what you need to do
- If the payment was entered by mistake and should not exist: you usually void or delete the bill payment so the bill becomes unpaid again.
- If the vendor actually refunded or the payment bounced: you keep the original bill payment, then record a deposit/expense and a vendor credit or refund to mirror what happened at the bank.
- Void or delete a vendor bill payment (QBO)
Use this if the payment should be completely undone in your books.
- Go to Expenses ▸ Expenses and filter Type = Bill payment (Cheque) or look up the vendor and open the specific bill payment.
- At the bottom, click More ▸ Void (keeps a zeroed record) or Delete (removes it entirely); this re-opens the linked bill as unpaid so you can pay it again correctly.
Tip: Void is usually preferred so there is still a visible audit trail with a zero-amount payment instead of it disappearing.
- Record a vendor refund or returned payment
Use this if money left and later came back (refund from vendor or bounced/returned payment).
- If the vendor refunded you (cheque or electronic):
- Record a bank deposit for the refund and set the Account to Accounts Payable (A/P), with the vendor’s name, so it becomes a credit for that vendor.
- Then go to + New ▸ Pay bills and apply that vendor “credit” (the deposit to A/P) against the original bill payment or open bills as appropriate.
- If a payment was returned/bounced (e.g., Bill Pay or cheque returned):
- Record an expense or journal against A/P to open the bill again and account for any bank fees related to the returned payment, as per the bounced-payment workflow.
- After that, the bill appears open again and can be repaid correctly.
- If you used QuickBooks Payments/Bill Pay
When you sent the payment through QuickBooks Payments (ACH/card):
- Recent transactions can sometimes be voided or refunded directly from your QuickBooks Payments / Merchant account using Reverse a Transaction or Void/Refund.
- After the processor voids/refunds, mirror the result in QBO by recording a deposit or vendor refund as in section 3 so that your bank and A/P match.
If you tell which scenario applies (wrong vendor, wrong amount, refund received, or payment bounced), a precise click-by-click sequence can be given for that case.
