Handle supplier refunds and credits in QuickBooks Online

1. Make sure you have already created the initial expense or cheque in QuickBooks and assigned a Category to it.
2. Select + New or + Create.
3. Select Bank deposit.
4. Go to the Add funds to this deposit section:
   • Enter the amount refunded by the supplier and select the category that you selected on the initial expense or cheque.
   • If this refund was for an expense that you linked to a customer or project, select the Track returns for customers checkbox, then select the customer or project. That way, your costs will not be overstated.
5. If you deposited customer payments for invoices into the bank account along with the supplier refund, add them in the Select the payments included in this deposit section.
6. Select Save and close.

Note: If you overpaid the supplier, no need to worry about a supplier credit. QuickBooks Online automatically creates an unapplied credit for you. Start at step 5.

1. Select + New or + Create.
2. Select Supplier credit.
3. In the Supplier field, select the appropriate supplier.
4. Enter the Payment date, Amount, VAT, ​and Category (This is the category, product, or service you’re getting a credit for).
5. Select Save and close.
6. Select + New and select Bank deposit.
7. In the Add funds to this deposit section, enter the following information:
   • In the Received From field, select or enter the desired supplier.
   • In the Account field, select the Creditors account (Accounts payable).
   • In the Amount field, enter the amount of the refund.
   • In the VAT field, select the appropriate VAT (not inclusive/exclusive of tax).
   • Select Save and close.
8. Next, go to + New and select Cheque.
9. Add the payee and select the Supplier Credit and Deposit in the pop-up window and add them both.
10. Balance should be 0 as they will cancel each other out.
11. Select Save and close.
12. If you have Online Banking, Follow this link to complete the steps in product Then match the record found on the Bank transactions (Take me there) page.

1. Select + New or + Create.
2. Select Credit card credit.
3. In the Payee field, select the appropriate supplier.
4. From the Bank/Credit account ▼ dropdown, select the credit card where you received the refund to.
5. Enter the Payment Date, refund Amount, VAT and Category.
   Note: The category used here is the original expense account on the original bill.
6. Select Save and close.

Keep in mind that this feature is currently in beta, which means that it’s still being tested and refined before its final release. 

Also, this feature doesn’t support accounts with multiple creditor accounts, such as multicurrency. If you have multiple creditors, you’ll need to manually create the deposit and payment.

Step 1: Mark the bill as paid

1. Follow this link to complete the steps in product
2. Select the Paid tab and double check if the bill has been paid. 
3. If you don’t see it, check the For review or Unpaid tabs, find the bill, and mark it as paid.

Step 2: Create a supplier credit

1. Select + New or + Create.
2. Select Supplier credit.
3. In the Supplier ▼ dropdown, select your supplier.
4. Depending on how you record purchases with this supplier, enter the Category details or Item details. Usually, this is the category, product, or service you’re getting credit for.
   Note: If you select a stock item, QuickBooks will put it back into stock. If the item is defective or if you don’t want it added back to stock, you can make a stock adjustment.
5. Select Save and close.

Step 3: Create a supplier refund

1. Follow this link to complete the steps in product Or navigate to the Supplier Refund page (Take me there).
2. Select the supplier credit that was created in Step 2.
3. Select the bank account to which the refund was made.
4. Select the date on which the refund was received.
5. Select Save.

QuickBooks Online will automatically create a deposit to the Creditors account and generate a payment for the supplier credit.

Step 4: Match the supplier credit with the paid bill

1. Go to Expenses. 
2. Select the Suppliers tab. 
3. Select the supplier credit that matches the paid bill. 
4. Select the bank. 
5. Select Save and close.

Step 1: Create a supplier credit

1. Select + New or + Create.
2. Select Supplier credit.
3. In the Supplier ▼ dropdown, select your supplier.
4. Depending on how you record purchases with this supplier, enter the Category details or Item details. Usually, this is the category, product, or service you’re getting credit for.
   Note: If you select a stock item, QuickBooks will put it back into stock. If the item is defective or if you don’t want it added back to stock, you can make a stock adjustment.
5. Select Save and close.

Step 2: Apply the credits to a bill

You can apply a supplier credit toward any open or future bill. When you’re ready to use the credit, here’s how to do it.

1. Select + New or + Create.
2. Select Pay bills.
3. Select a bill for your supplier from the list. You'll see the available credit with this supplier in the Credit Applied field.
4. Complete the rest of the fields like you normally do.
5. Select Save or Save and close.

Note: Keep in mind that this feature is currently in beta, which means it’s being tested and refined before its final release. 

1. Ensure the payment has been made against the bill.
2. Create a Supplier Credit (Take me there).
3. Navigate to the Supplier Refund page (Take me there).
   • You can also find the Supplier Refund option in the Expenses menu.
4. Select the desired Supplier Credit from the drop down.
5. Select the appropriate bank account.
6. Select Save.

QuickBooks will create a deposit to the Creditors account, and a payment will be made towards the supplier credit.

Sometimes a supplier may give you credit with them as a promotion or a thank you. Here's how to record the credit and apply it toward any open or future bill with them.

Step 1: Enter a supplier credit

This makes sure the credit hits the expense account you use for this supplier.

1. Select + New or + Create.
2. Select Supplier credit.
3. In the Supplier ▼ dropdown, select your supplier.
4. Depending on how you record purchases with this supplier, enter the Category details or Item details. Usually, this is the category, product, or service you’re getting a credit for.
5. Select Save and close.

Step 2: Deposit the money you got from the supplier

1. Select + New or + Create.
2. Select Bank deposit.
3. In the Account ▼ dropdown, select the account where you got the refund.
4. In the Add funds to this deposit section, fill out the following fields:
   • Received from: Select the supplier who gave you a refund.
   • Account: You need to select the Creditors account (Accounts payable) so you can tie the refund to the supplier's credit. This may seem a little strange, but it’s the best way to do this.
   • Payment method: Enter the method your supplier used to refund you.
   • Amount: Enter the amount of your refund.
5. Select Save and close.

Step 3: Use Pay Bills to connect the bank deposit to the supplier credit

Even though you aren’t paying a bill, this is the right thing to do. This last step is to keep your supplier expenses accurate.

1. Select + New or + Create.
2. Select Pay bills.
3. Select the bank deposit you just created. You’ll see the amount of the supplier's credit in the Credit Applied field. The TOTAL PAYMENT AMOUNT should be GBP £ 0.00.
4. Select Save and close.