How to record vendor refund in QuickBooks desktop?




How to record vendor refund in QuickBooks desktop

Quickbooks desktop users have the ability to record the refunds you receive from a vendor. Select the appropriate scenario and follow the steps to record the refund in QuickBooks correctly.

Procedure 1: The vendor sends you a refund check for a paid bill 

  • Record a Deposit of the vendor check:
    • Go the banking menu and click make deposits.
    • The payments to deposit window may appear, click ok.
    • Go to the make deposits window, click on received from the drop-down and choose the vendor who sent you the refund.
    • In the from account drop-down, choose the appropriate accounts payable account
    • Go to the account column, fill the actual amount of the vendor check.
    • Enter a memo, the check number, the payment method, and the class although this is optional.
    • Click save and close.
  • Record a Bill Credit for the refunded amount:
    • Go to the vendor’s menu and select enter bills.
    • Select the credit option button to account for the return of goods.
    • Enter the vendor name.
    • Click on the expenses tab and enter the accounts on the original bill.
    • Go to the amount column, enter the appropriate amount for each account(the amounts may have to be prorated).
    • Click save and close.
  • Link the deposit to the bill credit:
    • Go to the vendor’s menu, select pay bills.
    • Verify the deposits that match the vendor check amount.
    • Select Set credits and apply for the bill credit you created earlier then click done.
    • Click on pay selected bills, then click done.

Procedure 2: The vendor sends you a refund check for returned inventory items

  • Record a Deposit of the vendor check:
    • Go to the Banking menu, select Make deposits.
    • Then the Payments to Deposit window may appear, click OK.
    • Go to the Make Deposits window, click on the Received from the drop-down and select the vendor who sent you the refund.
    • Go to the From Account drop-down,  select the appropriate Accounts Payable account.
    • Go to the Amount column, enter the actual amount of the Vendor check.
    • Enter the remaining information in the Deposit account.
    • Click Save & Close.
  • Record a Bill Credit for the returned items:
    • Go to the Vendors menu, select Enter Bills.
    • Select the Credit option button to account for the return of goods.
    • Enter the Vendor name.
    • Click on the Items Tab.
    • Enter the returned items with the same amounts as the amount on the refund check.
    • Click Save & Close.
  • Link the deposit to the Bill Credit:
    • Go to the Vendors menu, select Pay Bills.
    • Verify the Deposit that matches the Vendor check amount.
    • Choose Set Credits and apply the Bill Credit you created earlier.
    • Click Done.
    • Click on Pay Selected Bills then click Done.

Procedure 3: The vendor sends a refund check that is not related to an existing bill

For Example rebates, reward incentives, refunds, reimbursements, or checks issued by vendors to cash out an existing credit.

  • Record a Deposit of the vendor check:
    • Go to the Banking menu, click Make Deposits.
    • Then the Payments to Deposit window may appear, click OK.
    • Go to the Make Deposits window, click the Received from the drop-down and select the vendor who sent you the refund.
    • Go to the Account drop-down, select the appropriate Accounts Payable account.
    • Go to the Amount column, enter the actual amount of the Vendor check.
    • Enter the rest of the information in the Deposit.
    • Click Save & Close.
  • Record a Bill Credit for the amount of the Vendor Check:
    • Go to the Vendors menu, select Enter Bills.
    • Select the Credit option button to account for the return of goods.
    • Enter the Vendor name.
    • Click on the Expenses Tab and enter the Accounts you would normally use for refunds.
      Note: If you are not sure which account to select, we recommend you to contact your accounting professional.
    • Go to the Amount column, enter the appropriate amount for each Account (the amounts may have to be prorated.)
    • Click Save Close.
  • Link the Deposit to the Bill Credit:
    • Go to the Vendors menu, select Pay Bills.
    • Verify the Deposit that matches the Vendor check amount.
    • Choose Set Credits and apply the Bill Credit you created earlier.
    •  Click Done.
    • Click on the Pay Selected Bills then click Done.

Procedure 4: A vendor sends a refund check on behalf of the original Vendor

  • Create a deposit for the vendor who sent the refund check:
    • Go to the Banking menu, select Make Deposits.
    • the Payments to Deposit window may appear, click OK.
    • Go to the Make Deposits window, click the Received from the drop-down and choose the vendor who sent you the refund.
    • In the From Account drop-down,  select the appropriate Accounts Payable account.
    • Go to the Amount column, enter the actual amount of the refund.
    • Enter a memo, check number, payment method and class although this is optional.
    • Click Save & Close.
  • Create a Bill for the Amount of the Deposit and apply it to the Deposit:
    • Go to the Vendors menu and select the Enter Bills.
    • Go to the Vendor field, choose the vendor who has sent the refund.
    • Go to the Amount Due field, then enter the amount of the refund.
    • Click on the Expense Tab.
    • Go to the Account field, select a Wash account.
    • Go to the Amount field, enter the amount of the refund.
    • Click Save & Close.
    • Now Go to the Vendors menu and select Pay Bills.
    • Select the Bill and click on the Set Credit.
    • Select the Credit and press Done.
    • Click Pay Selected Bills and then click Done.
  • Create a Credit for the Original Vendor:
    • Go to the Vendors menu, select on the Enter Bills.
    • Choose the Credit option button.
    • Go to the Vendor field, select the vendor who sent the refund.
    • Go to the Credit Amount field, enter the amount of the refund.
    • Click on the Expense Tab.
    • Go to the Account field, select the account used on the original Bill.
    • Go to the Amount field, enter the Amount of the refund.
    • Click Save and then Close.
  • Create a Bill for the Amount of the Credit which is affecting the Wash Account and then apply the Bill to the Credit:
    • Go to the Vendors menu, select Enter Bills.
    • Go to the Vendor field, select the vendor who sent the refund.
    • Go to the Amount field, enter the amount of the refund.
    • Click the Expense Tab.
    • Go to the Account field, select a Wash account
    • Go to the Amount field, enter the amount of the refund.
    • Click Save & Close.
    • Go to the Vendors menu and select Pay Bills option.
    • choose the Bill and click on the Set Credit.
    • choose the Credit and click Done.
    • Click Pay Selected Bills and then click Done.

Procedure 5: The vendor sends you the refund as a credit card credit

  • Go to the Banking menu, select Enter Credit Card Charges.
  • From the Credit Card drop-down, select the credit card account.
  • Select the Refund or the Credit option button.
  • Choose the appropriate Vendor name and enter the Date, Reference Number and the Amount.
  • Enter a relevant memo to describe the transaction.
  • If you have returned Items, click the Item Tab and enter the Items and Amounts from the refund.
  • If the refund does not have Items, click on the Expenses Tab, select the appropriate Accounts and enter the Amount.
  • Click Save & Close.

Conclusion

We hope these steps will help you to record vendor refunds in QuickBooks desktop but if you are still not able to do it, you can contact the Wizxpert QuickBooks Pro-Advisors team. A team of experts is available day-in and day-out to provide relevant and reliable solutions for all kinds of QuickBooks related issues.

 






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