I received a Paid In Full invoice for an event that I was going to teach and they had to cancel last minute and would like their money back. How do I refund them?

Welcome to QuickBooks Community, @nikki69.

Issuing a refund in QuickBooks Online is a three-step process. Following these steps ensures your bank balance and Accounts Receivable remain perfectly in sync.

Please note that this is only for recording purposes in QuickBooks, and you can refund the amount directly to your customer externally.

Here is the workflow to follow:

First, let's create a Credit Memo to record the credit on the customer's account. Here's how:

1. Navigate to All apps, then Sales & Get Paid, then Invoices. 
2. Open the paid invoice and select More actions, then Create credit memo.
   
3. Very the Customer and Credit Memo Date. 
4. Review the Product/Service, Amount, and Tax (adjusted automatically from the original and edit it if necessary.)
5. Select Save and Close.

Next, let's create an Expense to document the funds provided to the customer. Here's how:

1. Head to + Create and choose Expense.
2. On the Payee dropdown, select the customer.
3. On the Payment account dropdown, select the bank account. 
4. In the Category column, choose the Debtors account (Accounts Receivable). 
5. Enter the Amount and select the Tax option if applicable.
6. Hit Save.

Finally, link the Credit Memo and the Expense to indicate that the credit has already refunded. Here's how:

1. Go to + Create, then select Receive payment. 
2. Select the customer being refunded.
3. In the Outstanding Transactions section, check both Expense and the Credit Memo. 
4. Verify the Amount Received is $0.00, as the transactions cancel each other out. 
5. Select Save and close.

Once you link the transactions, your customer's account will display the credit memo as paid, and your bank account balance will accurately reflect the money sent.

However, if you want to refund individual items or services, you can create a refund receipt instead. Please visit this article for guidance on how: Refund your customer for an item or service in QuickBooks Online.

Your questions are always welcome here in the Community space.