How to Enter a Refund in QuickBooks Desktop

Users may need to enter a refund in QuickBooks Desktop or process a refund if money must be returned to a customer or a vendor has returned the money. In both these cases, users need to create appropriate documents and enter the data correctly. Otherwise, you will receive errors whenever you create reports in QuickBooks desktop.

How to Record a Refund to a Customer in QuickBooks

To understand how to record a refund in QuickBooks, let us start off with customer refunds. In some instances, the customer may return the item and ask for a refund. In such cases, you will have to refund the payment made by the customer. If you have not included the transaction in a reconciliation statement yet, then you can void the transaction. QuickBooks will automatically inform you about any settled transactions. In those cases, you will have the option to refund the payment or simply give a credit instead.

Note: We recommend that you void the transactions because refunding it will accrue additional charges. Further, the customer will only get the money back after several days of initiating the return.

To Void a Payment in QuickBooks Desktop, Follow the Steps Provided Below:

  1. Launch QuickBooks and sign into the desired company file.
  2. From the Customers menu, select Customer Center.
  3. From the Transactions tab, click on Sales Receipts or Received payments.
  4. Double click on the Payment and select Edit.
  5. Click on Void Sales Receipt, then Save & Close.

The transaction is voided, and the background accounting tasks are handled by QuickBooks itself. The debit or credit card isn’t charged. In rare instances, the customer may have to get in touch with his or her bank if the bank decided to put the authorization of return on hold.

How to Refund the Payment in QuickBooks

The process to know how to issue refund in QuickBooks is: If the customer made the payment through a credit card, debit card, or check, then you can refund the payment amount. Refunding a credit card is fairly easy as the process is taken care of by QuickBooks. However, refunding other payment modes can be slightly complex.

To Refund the Payment in QuickBooks, follow the steps provided below:

  1. From the Customers menu, select Credit Memos/Refunds.
  2. Click on Customer: Job and select the Customer to whom you need to issue the refund.
  3. Enter the services or products for which the refund is to be issued.
  4. Click on Save and Close.
  5. The Available Credit window will appear. Click on Give a Refund, then Ok. However, if you wish to provide credits instead of a refund, then click on Retain as an Available Credit, then Ok.
  6. Click on Issue this refund via field and select Check or Cash. Also, select the bank account from which the money for the refund will be deducted. However, for credit card payments, follow the steps provided below:
    1. Click on the Issue this refund via field.
    2. Select Credit Card type.
    3. Enter the Credit Card Info. Users also have the option to swipe a card and authorize the transaction.
    4. Mark the option for ‘Process credit card refund when saving’.
  7. Hit Ok.

The amount will be refunded, and the data will be recorded automatically by QuickBooks. The customer should receive the transaction within 7-10 working days.

How to Record a Refund from a Vendor in QuickBooks

Vendor refunds are a lot more complicated to record, as most of the work has to be done manually by the user. According to different scenarios, the steps to record the refund in QuickBooks change. However, in this article, you’ll find the steps to record a refund provided as a check or a credit card credit.

Read More: How to Record a Loan Receivable in QuickBooks?

Refund via Check

There are three processes in recording a refund provided via check. First of all, you need to record the deposit of the check, after which you need to enter a bill credit for the refund. Finally, you have to link the Bill Credit and the Deposit. Let’s get started.

I. Record Refund Check Deposit

  1. Click on Banking from the main menu and select Make Deposits.
  2. Click Ok in the Payments to Deposit window.
  3. Click on the Received From dropdown menu from the Make Deposits window.
  4. Select the vendor who provided the refund.
  5. Now, select the apt Accounts Payable account from the From Account menu.
  6. Enter the Check amount.
  7. Enter additional details like check number, method of payment, memo, and class.
  8. Click on Save and Close.

II. Record Bill Credit for the Refund

  1. Select Enter Bills from the Vendors menu.
  2. Select Credit and enter the Vendor Name.
  3. Select the Accounts listed on the original bill from the Expenses tab.
  4. Enter the Amount for check.
  5. Click on Save and Close.

III. Link the Bill Credit and the Deposit

  1. Go back to the Vendors menu and click on Pay Bills.
  2. Select the Deposit which you created by following the aforementioned steps.
  3. Apply by Bill Credit after selecting Set Credits. Hit Done.
  4. Click on Pay Selected Bills, then Done.

Read More: How to Set Up Credit Card Payments Through QuickBooks?

How to Record Refund Received as Credit Card Credit in QuickBooks

If the vendor provided the refund as credit card credit, then follow the steps provided below:

  1. Go to the Banking menu and click on Enter Credit Card Charges.
  2. Select the Credit Card Account from the dropdown menu.
  3. Click on Credit Card Button.
  4.  Enter the name of the vendor also enter the date, reference number and amount.
  5.  Enter any additional details for the transaction in the memo.
  6.  From the item tab select any item that was returned by you to the vendor
  7.  Go to the expenses tab and select the appropriate account.
  8.  Enter amount for the returned item.
  9. Click on Save and Close.

Recording of the Bill Credit for the Money Back

  • Our return guidelines are simple, but effective. In the first step, you’ll need to follow the “Vendor’s menu” -> “Enter Bills” -> “Credit option.”
  • Tap the “Expenses” tab after entering your vendor name in the search field.
  • You need to insert the accounts on the native bill.
  • Click on the “Amount column” enter the suitable amount for every account.
  • Finally check on “Save” and close the tab.

Link to Deposit to the Bill Credit

  • From the “Vendor” menu hit the “Pay bills” option.
  • Confirm the vendor deposit for the same amount as your checking account.
  • To get your bill credit, select “Set credits” and then apply for your bill credit. When it’s approved, you can then click done..
  • Tap on the pay section, then click “Done“.

This Read: Set up Credit Card in QuickBooks

When Some other Vendor Sends Money Back on Behalf of the Native Vendor

Ask the Vendor who has sent you a Refund Check to prepare that Deposit

  • In first step, go to the “banking menu” & Choose “make deposits“.
  • When you’re ready to make a deposit, select the “Received” option from the drop-down and choose the “Vendor” who sent you your refund.
  • To select Accounts payable, navigate to the “Accounts payable” account in your form’s drop-down menu.A business has entered my life as I end today and it is necessary that they be removed.
  • Just enter the amount in the “Amount” column and then click on “Go!”. From this point, you’ll need to enter your original refund amount and its status.
  • Finally click save and close

Prepare a Bill for the Deposited Amount and Apply it to the that

  • If you select the “Enter Bills” option, then you’ll be able to choose a bill and a vendor who has submitted an invoice..
  • Go back to the vendor that paid you, and select the “Vendor” option.
  • After filling out the information, you’ll notice that there is a column where you can enter the money back amount.
  • Click on the “Expense” tab
  • In the “Amount field,” enter the amount you want to remove from your total.
  • Click “save and close“.
  • Get the “Pay Bills” option from the Vendor’s menu.
  • Choose the “Bill” and press on the “Set Credit“.
  • After you choose “Pay selected bills”, the bill will be finished.

Make a Bill for the Amount of the Credit Which is Affecting the Wash Account, and then Apply to the Bill on the Credit Account.

  • The vendor’s menu option requires you to select the “enter bills” button..
  • Select the “Vendor” who paid you money back.
  • Enter the amount of the refund.
  • On the “Expense tab”, tap the “Wash Account” button to create a wash account.
  • After that, you’ll need to insert the amount of money back.
  • Click “Save and close“.
  • Select the “Pay bills” option from the vendor’s menu.
  • Select the “Credit” after clicking on the “Set credit“.
  • We’ll complete your request once you select the option for “Pay selected bills.”

Situation where the vendor sends a money back check that is not related to an existing bill

Record a Deposit of the Vendor Check

  • Go to the “Banking” menu and press the “Make Deposits” option, from there.
  • If you want to refund a specific vendor, all you have to do is select the “Received from the drop-down” and select the appropriate “Vendors” account. You’ll need your own personal bank account.
  • The amount must be entered in the “Amount” column, and it cannot exceed the original check.
  • Just insert required information in the “Deposit“.
  • Click “Save and close“.

Recording of Bill Credit for the Vendor’s Check Amount

  • Select the “Enter bills” from “Vendors” menu.
  • Choose the “Credit option” to the account for the return of goods.
  • Enter the “Vendors” name.
  • Click on the “Expense tab” and enter the “Account” you would normally use for the refunds.
  • Enter the account appropriate amount for each “Account” in the amount column.
  • Then “Save and Close” the window.

Connect the Deposit to the Bill Credit

  • From the Vendor’s menu choose “Pay bills”.
  • Match the amount you deposited and “Vendor’s check amount”.
  • Choose “Set credit” and apply the credit you have made recently
  • Once you choose to pay selected bills, it will be completed.

If the Refund Sent by the Vendor Credit of the Credit Card

  • In the first step, go to the “Banking Menu” and choose “Enter Credit Card Charges.”
  • Then, pick up the “Money Back” option.
  • Identify “Vendor name” and put in the mount and date reference number.
  • Enter the final article with a brief “Memo” explaining the entry.
  • If you return items to us, please click the “Tab” button and enter the items from your refund.
  • Choose the “Expense tab” and Select the “accurate account” and “Enter the amount“.
  • Lastly, click “Save and close“.

These are the best solutions and procedures to record vendor refund in QuickBooks Desktop. If you run into any issues, we’re always here to help you through these steps. You should also just give us a call if you have any questions. You’ve successfully recorded the refund provided via a check. However, if the scenario is different, you’ll have to make adjustments and perform additional steps to properly record the refund in QuickBooks.

The refund from the vendor has been successfully recorded in QuickBooks. For more information to know how to issue refund in QuickBooks or related topic, you can get in touch with our experts at our LIVE CHAT.

Frequently Asked Questions:

  1. By when will the customer receive the refund?

    It will take 7-10 working days for the customer to receive the refund.

  2. How to Create a Refund Account in QuickBooks?

    1. You need to make a refund account only when any user returned your product or unhappy with your service.
    2. Pick the Refund Receipt from the + menu to open a new refund receipt.
    3. Get a customer from the drop-down option menu in the refund receipt slot.
    4. Use a preferred payment option from the drop-down suggestion’s menu below your customer data to decide how you will pay the customer’s refund.
    5. Next, you may want to designate the account from which you want to claim the refund. Pick an account from the drop-down menu under the label labelled Refund From. This is the account you want the refund payment to draw funds from.
    6. Pick the product or service for which a refund is provided under the column called ‘PRODUCT/SERVICE’.
    7. Check the Sum column to make sure it’s the correct number.
    8. Take note of the number of the cheque. If the cheque number automatically created by QuickBooks does not match the number on the cheque you are going to write for this refund, you may want to manually insert a cheque number.
    9. You can select Print Cheque at the bottom of the screen when you have finished receiving a refund or select the box below your cheque number to allow the Print Later option.
    10. Select Save and Close to exit the refund receipt window when you’re done.
    Select on Invoicing in the navigation on the left and then click on Customers to see this refund later.
    11. Locate the customer you have refunded in your Customer List, and afterwards click on their name to open the Customer Detail window.
    12. You will see a list of all the exchanges you have on record with this client here in the Customer detail window. You will notice that QuickBooks has added back the refund you have just issued to this client, as well as your previous transactions.

  3. Is it okay to not select any item for the refund from the vendor?

    Yes, it is perfectly acceptable to not select any item when recording the refund from a vendor.

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