I've got just the steps you'll need in recording the refund, @hotlocks.
When you receive a refund from a vendor, you must first record a supplier credit for the expense that the refunded payment was applied. Then, you'll have to deposit the money received. After that, apply or link the deposit to the credit memo with a "zero dollar" payment. I'll show you how to do it.
Let's start recording the refund by entering the vendor credit.
Click on the +New button.
Select Supplier/Vendor Credit.
Select the vendor's name from the Vendor drop-down list.
Depending on how you record purchases with this vendor, enter the Category details or Item details. Usually, this is the category, product, or service you’re getting credit for.
Enter the amount.
Select Save and close.
Then, let's deposit the money received.
Select Bank deposit.
Choose the bank account.
In the Add funds to this deposit section, fill in the following fields:
Received from: Select or enter the vendor name
Account: Select the Accounts Payable account.
Amount: Enter the cheque amount.
Select Save and close.
Lastly, let's link the deposit to the vendor's credit memo with a "zero dollar" payment.
Let me help you record the vendor refund, @hotlocks.
Can you tell us more where you've seen the prompt to upgrade your subscription? Either which version of QuickBooks you're using, you can still enter a vendor credit, create a bank deposit, and link the deposit to the vendor's credit memo with a zero dollar payment through Pay bills feature to record a refund.
The steps that we're mentioned by LieraMarie_A is the process to record a vendor refund. The other way of handling it is by entering the supplier credits. Then, pay the bill using the supplier credits. This is the best option if you're planning to receive the credit from your supplier and apply it to future bills.
In case you'd still like to upgrade your current subscription, you can check this link for more information about the monthly subscription and the features they have: https://quickbooks.intuit.com/uk/pricing/.
You can upgrade your subscription from the Billing & Subscription menu. Check the steps below:
Go to the Gear icon ⚙ and select Account and Settings.
Select the Billing & Subscription menu and choose to Upgrade your plan.
Click on Select Get started after choosing your new plan.