Managing Declined Credit Cards in QuickBooks Online

by | Apr 30, 2015

QuickBooksOne of the benefits of connecting QuickBooks Online (QBO) with Intuit Merchant Processing is that you can run credit cards when you take a Payment on an Invoice, or make a Sales Receipt on the spot.

Unlike with Square or PayPal, the money shows up in your bank account with a matching amount; Intuit deducts its merchant service fees in a separate transaction.

Best of all, in the Plus version you can use Recurring Transactions to automatically charge a customer’s credit card without having to lift a finger.

However, there is an issue with the current version of QBO: if the credit card is declined, the Invoice is still marked as closed. This wreaks havoc with your Accounts Receivable. I have been told that a fix is coming in a future release, but here are a few features that will help you manage declined credit cards in QuickBooks Online.

First, on the home screen’s Activities List, you’ll see a warning to fix declined credit card payments. Click on “Take Actionand you’ll be able to fix the card number and try again.

Managing Declined Credit Cards in QuickBooks Online

Another option is to go to your Chart of Accounts and look for a new account called Credit Card Receivables. This account is created by QBO to store those declined charges, so you can see them in a register.

With this list you can reopen your Invoices and recollect payment from your customers.

Hopefully this article will become obsolete, but for now, it helps to know where to look to work around this bug.

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About Alicia Katz Pollock

With a Masters in Teaching from Tufts University, a QuickBooks®️ Online Advanced Certification and more than 30 years’ experience in the tech industry, Alicia is passionate about finding creative, practical solutions to complex and everyday tech problems. She also loves a good laugh!

Comments

2 Comments

  1. Peggy

    So what do you do when the declined payments are uncollectible?

    Reply
    • Alicia Katz Pollock

      If you are cash-based, you simply delete or void the invoice. If you are Accrual-based and in the same reporting period, you can do the same. But if you’re in a later reporting period, you have to write it off to bad debt:
      1. Make a note of the customer name, items and amounts on the invoice from the closed period.
      2. Create a credit memo.
      3. Select the same customer, items and amounts in this credit memo as the ones noted in step two – ensuring that the date of the credit memo is in the current period.
      4. Click Save & Close.
      5. The Available Credit window will be displayed.
      6. Select Apply to an invoice and click OK.
      7. Select the invoice from the closed period.
      8. Click Done.

      Reply

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