Voiding and Refunding Client Payments

After a payment has been recorded, you may need to reverse it entirely. Discovery supports two ways to do this: voiding a payment and refunding a payment. Both actions will remove the payment from any invoices it was applied to and restore those invoices to their previous balance, but they are used in different situations and record different information in your accounting history.

When to Void a Payment

Use Void when a payment needs to be reversed entirely — most commonly when a payment was returned due to non-sufficient funds (NSF) or when it was entered in error.

When you click Void, a modal will appear and ask: "Is NSF?"

If you select Yes (NSF):

  • The void reason is automatically set to NSF — no reason field is shown.
  • The void date defaults to today's date. You may adjust it if needed.

If you select No:

  • A Void Reason field appears. You are required to provide an explanation.
  • The void date defaults to the payment's original receipt date. You may adjust it if needed.

What happens when a payment is voided:

  1. The payment is marked as voided and can no longer be edited or applied.
  2. The Applied Amount on the payment is set to zero.
  3. Any invoices the payment was applied to are unapplied and their balances are restored. An invoice that was Paid and now has a balance goes back to Delinquent if it’s past its due date, or to Sent if it isn’t. Other invoices keep their current status.
  4. The applied payment records linking the payment to those invoices are removed.
  5. Reversing journal entries are created in Discovery to offset the payment’s original entries, dated the void date and numbered PMTVD-…. Like other journal entries, they aren’t sent to QuickBooks automatically. Use Send Unposted Entries To Accounting System (QuickBooks Online) or the journal entry export (QuickBooks Desktop).

Note: A payment can only be voided if it has not already been voided or refunded.

When to Refund a Payment

Use Refund when a payment was legitimately received but money is being returned to the client — for example, due to a billing dispute, overpayment, or service cancellation.

Refunding a payment requires no additional inputs beyond your confirmation.

What happens when a payment is refunded:

  1. The payment is marked as refunded and can no longer be edited or applied.
  2. The Applied Amount on the payment is set to zero.
  3. Any invoices the payment was applied to are unapplied and their balances are restored. An invoice that was Paid and now has a balance goes back to Delinquent if it’s past its due date, or to Sent if it isn’t. Other invoices keep their current status.
  4. The applied payment records linking the payment to those invoices are removed.
  5. Reversing journal entries are created in Discovery to offset the payment’s original entries, dated the day you refund and numbered PMTRFD-… so refunds are easy to tell apart. They aren’t sent to QuickBooks automatically. Use Send Unposted Entries To Accounting System (QuickBooks Online) or the journal entry export (QuickBooks Desktop).

Note: A payment can only be refunded if it has not already been refunded or voided.

Void vs. Refund — Quick Reference


 Void Refund
Use when... The check bounced (NSF) or the payment was entered in error Money was genuinely returned to the client
Required inputs NSF answer + date (reason required if not NSF) None
Effect on invoices Restores balances; Paid invoices return to Sent or Delinquent Restores balances; Paid invoices return to Sent or Delinquent
Accounting entries Reversing entries (PMTVD-…), dated the void date Reversing entries (PMTRFD-…), dated the refund date

Note: If Sync Client Invoices With Quickbooks is on, record payments, voids and refunds in QuickBooks Online. Voiding or refunding a payment in Discovery doesn’t change the invoice or payment in QuickBooks Online, and Discovery’s invoice balance can be overwritten the next time it syncs from QuickBooks.

Both actions are permanent and cannot be undone. If you have questions about which option is appropriate, please reach out to your account manager or contact our support team.

If you have additional questions or need more in depth information, please feel free to send us a message using the help beacon in the lower right-hand corner.

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