We are a manufacturing company that requires a deposit before production begins. We have a customer who paid a deposit a year ago, but has now cancelled his order and we need to refund his deposit. When the payments are received, they are not applied to an invoice, they are just left as a credit in the customers account. How do I process this refund in quickbooks? Thank you.
Assuming you have created an item called Advance / Upfront Deposit for the Sales Receipt ( since cash is received in advance use the Sales Receipt )
Issue a Cheque > Items tab > ITEM select Advance / Upfront Deposit and the relevant Customer, enter other details hit Save.
Note: Advance / Upfront Deposit item need to be linked with a liability type chart of account.
Comment back for further clarifications, even if you follow a different method to enter the upfront payment.
Write a cheque to the customer. In the account, use 'Accounts Receivable'. Tab over to the 'Customer:Job' field, and type in your customer's name. Now this cheque has just offset the credit that you have previously applied to their account in the A/R module. The second step would be to go to Receive Payments. Type in the customer's name. Apply the outstanding credit against the cheque amount that you just paid, which will be showing in the window.