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.
Then, let's deposit the money received.
Lastly, let's link the deposit to the vendor's credit memo with a "zero dollar" payment.
These instructions are available from our guide on entering a refund from a supplier.
Once done, you can reconcile your account to make sure they match your bank statement.
Please touch base with us here if there's anything else you need, I'm determined to ensure your success. Have a wonderful day.
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.
You can check the Scenario 2 in this article for more information: How do I handle supplier credits and refunds?.
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:
See this article for more information: Upgrade your QuickBooks Online subscription.
I'm always here if you need more help or if you have follow-up questions in recording this refund. Take care and have a wonderful day!