How to categorise a credit transaction as refund and not income?

Hello akamali, 

Knowing the right way to categorize your transactions is crucial as it helps maintain clean books. QuickBooks offers the necessary tools and resources required to help streamline your accounting. I'll be happy to point you in the right direction so you can get back to being the best at managing your work. 

Based on what you've described, I highly recommend reaching out to an accounting professional for expert advice on how to record the transactions. If you're not in contact with a professional, don't worry, you can search for one using this link here. In the meantime, check out the helpful resource below for more info on:

Record a customer refund in QuickBooks Online

I'll also leave this question open in the Community so other accountant users can share their advice. Otherwise, feel free to ask other questions, I've got your back.  

I appreciate the reply but this is a simple question, I don't really need to reach an accountant to figure it out. 

Accounting -> Chart of Accounts -> New -> Account Type : Income, Detail Type: Discounts / Refund given and name it something meaningful. 

If it's a refund for a previous transaction, you can always credit it back on the same account as the original transaction. 

Hi akamali,

Thanks for reaching back out to Community.  In QuickBooks Online, you'll be able to link refunds to supplier credits.  I'd be happy to assist!

It's my understanding that you've already created the credit.  You'd need to also enter a supplier refund by following these steps:

1. Select + New.

2. Choose Bank Deposit

3. In the Add funds to this deposit section, fill in the required fields

4. Review the information and then hit Save and close

You're ready to link the refund to the credit by going to:

1. + New.

2. Select Expense or Cheque.
3. From the Payee dropdown, select the Supplier

4. Leave the Ref/Cheque no., Payment date, Amount and Memo fields blank

5. From the Add to Expense or Cheque section on the right, Add the outstanding supplier credit and the deposit. 

For your reference, here's an article for handling supplier credits and refunds.

If you require additional assistance or have any other questions, please don't hesitate to reach back out.  We'd be happy to help!

Hi did you figure out how to categorise the refund , i am the same i have been refunded from an energy company who took payment twice , it is coming up as "sales" on my banking  but its a refund what category do i use? thanks

Hi there allurech,

It's vital that all your transactions are entered correctly for your books to be balanced. QuickBooks Online is a tool able to import transactions from your bank in order to save you time with data entry. I can provide some information about how to enter a refund from a supplier.

If you receive a refund from a supplier, then you'd have to first enter it manually using the various methods in this article depending on the situation, then match it after it's been created manually.

If you have any other questions, feel free to reach out here.

I'm dealing with a refund issue also but in my case, I issued a refund rather than received one. 

I need to categorize this transaction but the category list has nothing that remotely suggests a refund. What category would apply? Must I add a category?

Please don't refer  me to an "experrt." The question is simple. I only need an answer.

Hello EnnisP,

When it comes to customer refunds, QuickBooks Online enables you to record it based on different scenarios, so your books remain balanced.  To learn more, and use the best option, click here. 

Let us know if you have any other questions.  We would be glad to help!