How to Reverse a Vendor Payment in QuickBooks Online

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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.

1. 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.

2. 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.

3. 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.

4. 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.