How to Record a Refund From a Vendor in QuickBooks Online

Recording a refund can be proven slightly tricky for some of the users but it is something that has to be done as soon as possible. The vendor can issue a credit document stated that you no more owe the amount or they can also issue a refund check. In both cases, we’ll teach you how to record a refund from a vendor in QuickBooks Online.

In the first case, when a vendor issued a credit document then you need to record it on the vendor credit and apply it when you pay the vendor’s bill.

And in the second case, when a vendor issued a refund check then you still have to record it to the vendor credit but also you need to add the deposit for vendor check and link it to the vendor credit.

Easy steps to record a refund from a vendor in QuickBooks Online

1. Enter the vendor credit

  • Click on the ‘+New’.
  • Then from the ‘Vendors’ list select the ‘Vendor credit’ option.
  • Browse the vendor from ‘choose the vendors’ drop-down menu.
  • Enter the issue date of the credit document/refund check.
  • At the top right corner enter the credit amount.
  • Next, In the account details select the account you used for original billing.
  • In the Item details, select the items that you returned to the vendor.
  • You can also attach an electronic copy of the credit.
  • Lastly, save and close from the bottom right.
Record Refund from Vendor in QuickBooks Online
Vendor Credit Window-record refund from Vendor

And if you receive a check then you have to record refund check from a vendor in QuickBooks Online. 

2. Deposit refund check of vendor

To record refund check QB Online after recording it into vendor credit you also need to deposit check in the QuickBooks.

  • Click on the ‘+New’.
  • Then from the ‘Others’ column select the ‘Bank deposit’ option.
  • In the ‘Add new deposit’ section fill all the required fields.
  • In ‘Received from’ enter the name of the vendor.
  • In ‘Account’ select the account payable.
  • In the ‘Amount’ field enter the amount of refund.
  • Click on the downward arrow on the side of ‘Save and new’ and select the ‘Save and close’ option.
Record a refund from a vendor in QuickBooks Online
Bank Deposit Window in QuickBooks Online

For linking vendor credit and bank deposit, we’ll be using expenses. this will help in keeping accurate vendor expenses.

  • Click on the ‘+New’ icon.
  • Then from the ‘Vendors’ column select the ‘Expenses’ option.
  • Select the vendor that issues credit document/refund check.
  • On the right hand add the current transaction in both Vendor credit and bank deposit.
  • After adding the net balance of the bill payment will become zero. 
  • At last ‘Save and close’.
Record a refund from a vendor in QuickBooks Online
Expense window in QuickBooks Online

This is the whole procedure to record a refund from a vendor in QuickBooks Online.

4. Record a credit card refund in QuickBooks Online

This method is used when you make a purchase using the business credit card and for some reason, you have to return the product. Then the vendor usually will issue a refund to the credit card account that you used.

  • Click on Chart of Accounts from the ‘gear’ icon on the left. 
  • Select the credit card from the list and then click on the ‘view register’ on right.
  • Next in the ‘Add CC expense’, drop-down menu select ‘CC Credit’.
  • A new window named ‘Credit Card Register’ will appear in this you need to fill some details.
  • In account, check whether you select the right credit card or not.
  • Next, enter the date you returned the product.
  • In the Payee account, select the vendor to whom you return the product.
  • In Memo, you can add a relevant description.
  • In the Payment section, enter the price of the returned product.
  • After correctly enter the fields. Click on the ‘Save’ on the bottom right. 
Record a refund from a vendor in QuickBooks Online
Credit card refund window in QuickBooks Online

Frequently Asked Questions

How to enter a customer refund in QuickBooks?

If a customer mistakenly overpaid you or pay in the advance for the products and services then cancel the order and you need to enter a refund so for that first go to ‘+New’ then select ‘Check’ or ‘Expenses’. Then enter the customer name in Payee and the account in which payment received. In the first category select ‘Account Receivable’ and enter the amount of payment then ‘Save and Close’

Related Article: How to Record a Refund from a Vendor in QuickBooks Desktop?


Above we covered all the methods to record a refund from a vendor in QuickBooks Online. You can perform any of them as per your requirements.

If anything related to QuickBooks accounting software is still bothering you and you are seeking for an expert who can drag you out from this situation. Then our team of QuickBooks ProAdvisor with experienced accounting professionals and certified technicians will help you and instantly fix your problems. We provide 24/7 service so don’t hesitate to call us anytime at our toll-free number +1-855-441-4417

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