cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Level 1

Partial refund for a service Invoice

Hi there 

 

I have read through numerous posts about refunds and a bit confused. I have a number of invoices for a service that were paid last September by bank transfer. A customer has now cancelled the service and is due a partial refund.

 

I have set up a Refund Receipt for the customer as described in some posts and it shows as expected in the P&L Report under discounts/ refunds given. The bank account is linked which I can view via the Banking menu. Payments coming in I match up with the invoices. Will I see the payment going out and how do I match it up to the Refund Receipt? 

 

In some other posts it suggests doing a refund by way of an Expense? This is where I am confused.

Which way is correct and what are the differences? In which scenario would I chose one way over the other?

 

Also in the Sales menu there is no option to view Refunds as a list (like with Invoices)? I only have 3 options, Customers, Invoices, Products & services. Do I need to change something in Settings to have Refunds show as an option?

 

If anyone can help to explain (in simple terms as I am not a trained accountant), I would be very grateful. 

:-)

 

Solved
Best answer May 27, 2020

Accepted Solutions
Highlighted
QuickBooks Team

Partial refund for a service Invoice

Glad to see you in the Community, JC50.

 

I’m here to help and guide you on how to properly process the refund for your customer.


Based on your situation, let’s use the refund receipt for the service that was canceled. To avoid duplication, don’t enter a credit note.


Entering a refund receipt is simple and easy. Follow these steps to input the transaction.

 

  1. Tap the New menu in the upper left and select Refund Receipt under Customers.
  2. Click the Customer drop-down to enter the customer you’re working on.
  3. In the Refund From drop-down, pick the bank you deposited the payment for the invoice.
  4. Add service in the Product/Service column and then the amount.
  5. Fill in the remaining field boxes.
  6. Hit Save and close.

In regard to recording an expense, this process only applies when the customer wants to redeem their open credits. They made a prepayment for an order but canceled it before receiving the goods or services. The client wants you to reimburse an accidental overpayment.


You can bookmark the Record a customer refund in QuickBooks Online guide for future reference. The article is scenario-based and it outlines the steps on how to input the refund in your company.

 

For your other concern, yes, you'll see the payment going out and will be able to match it to the refund receipt. Also, the menus mentioned above are the ones that will show when you open the Sales page.

 

There's no need to configure your QuickBooks to see the refund instead run the Transaction List by Customer Report. Then, customise it to show all the refund receipts.

 

  1. Go to Reports menu at the left panel, then type Transaction List by Customer in the Search field.
  2. Click Customise on the upper right.
  3. Hit the General drop-down to select the appropriate date on the Report period.
  4. Now go to the Filter drop-down and choose Refund on the Transaction Type drop-down.
    rf.png
  5. Hit Run report to view the changes.
    rf1.png

You can find our training videos through this link to help get familiar with navigating the program: Video Tutorials for QuickBooks Online.

 

Let me know if you have any clarifications or need further assistance. I’m always ready to help and make sure you’re taken care of. Enjoy the rest of the day.

View solution in original post

10 REPLIES 10
Highlighted
QuickBooks Team

Partial refund for a service Invoice

Glad to see you in the Community, JC50.

 

I’m here to help and guide you on how to properly process the refund for your customer.


Based on your situation, let’s use the refund receipt for the service that was canceled. To avoid duplication, don’t enter a credit note.


Entering a refund receipt is simple and easy. Follow these steps to input the transaction.

 

  1. Tap the New menu in the upper left and select Refund Receipt under Customers.
  2. Click the Customer drop-down to enter the customer you’re working on.
  3. In the Refund From drop-down, pick the bank you deposited the payment for the invoice.
  4. Add service in the Product/Service column and then the amount.
  5. Fill in the remaining field boxes.
  6. Hit Save and close.

In regard to recording an expense, this process only applies when the customer wants to redeem their open credits. They made a prepayment for an order but canceled it before receiving the goods or services. The client wants you to reimburse an accidental overpayment.


You can bookmark the Record a customer refund in QuickBooks Online guide for future reference. The article is scenario-based and it outlines the steps on how to input the refund in your company.

 

For your other concern, yes, you'll see the payment going out and will be able to match it to the refund receipt. Also, the menus mentioned above are the ones that will show when you open the Sales page.

 

There's no need to configure your QuickBooks to see the refund instead run the Transaction List by Customer Report. Then, customise it to show all the refund receipts.

 

  1. Go to Reports menu at the left panel, then type Transaction List by Customer in the Search field.
  2. Click Customise on the upper right.
  3. Hit the General drop-down to select the appropriate date on the Report period.
  4. Now go to the Filter drop-down and choose Refund on the Transaction Type drop-down.
    rf.png
  5. Hit Run report to view the changes.
    rf1.png

You can find our training videos through this link to help get familiar with navigating the program: Video Tutorials for QuickBooks Online.

 

Let me know if you have any clarifications or need further assistance. I’m always ready to help and make sure you’re taken care of. Enjoy the rest of the day.

View solution in original post

Highlighted
Level 1

Partial refund for a service Invoice

Thank you for the detailed information and sorry it has taken me so long to reply.

 

All the refunds have now been completed as explained and they matched up exactly.

 

I was also able to run the report to see the refund list as per the instructions you gave.

 

Many thanks

:-)

 

 

Highlighted
Level 1

Partial refund for a service Invoice

Hello 

 

I have another question on this as I have one more refund to do as above but the payment is being transferred to their international bank.

Our bank has charged us £15 charges and therefore reduced the amount refunded to the customer so the payment going out does not match with the total on the Refund Receipt. Hence I can't match it up in QBO.

 

How do I correctly record the difference?

Do I simply reduce the total on the Refund Receipt?

Or must I add a separate line on the Refund Receipt stating bank charges? In which case what type of Service do I need to create for this to be an available option?

 

Lastly do I need to do anything as an Expense?

 

Thank you kindly for any instructions.

 

Highlighted
Moderator

Partial refund for a service Invoice

It's nice to have you back here, Ju50.

 

You got me here to help you with how to handle bank charges in QuickBooks Online. Let's start by creating an expense account for the bank charge if you don't have one already. The steps are as follow:

 

  1. Go to the Accounting menu and select Chart of Accounts.
  2. Click New.
  3. Enter all the needed information on the Account page.
  4. Select Save and close.

Once done, create a service item named bank charge. Here's how to do it:

 

  1. Go to the Settings icon and choose Products and Services.
  2. Select New and choose Service.
  3. Name it Bank Fees.
  4. Under Income Account select the Expense Account you just created.
  5. Select Save.

You can refer to this article for the detailed steps: How to record bank fees

 

I'd appreciate it if you'd update me on how the steps work. I want to make sure this is taken care of.

Highlighted
Level 1

Partial refund for a service Invoice

Thank you again.

 

I have followed the steps as described to set up the bank fees expense

 

So now I have the following scenario:

 

In the customer records it shows a Refund Receipt of £1350

 

In Banking the bank account list For Review shows two separate items listed

 

Payment going out of our bank to the customers bank at £1335

Bank charges at £15

 

I need to match the payment to the Refund Receipt but it is the original amount £1350

How do I reduce the amount correctly on the Refund Receipt in the customer account.

 

The link you provided refers to Adjustment Notes but I don't have that option in QBO.

(Also the example that gives is to adjust the total for an incoming payment whereas I am doing an outgoing payment)

 

Many thanks

 

Highlighted
Moderator

Partial refund for a service Invoice

Thanks for getting back to us, @JC50.

 

Since you already set up an account and item for the bank fees, all you need to do is to open that specific Refund Receipt, then add the expense item on another line. After that, enter the bank charge amount as negative. This way, the amount will be deducted and will match the downloaded bank transaction.

 

Here's how to do it:

 

  1. Log into QuickBooks Online (QBO) and open the Refund Receipt.
  2. Add another line item, then select bank fees item you've created in the Product/Service column.
  3. Enter the amount as negative.
  4. Hit Save and close to complete the process. 

 

Once done, you can now match them in the Banking page. For further guidance, please refer to this article: Add and match downloaded bank transactions [Video].

 

Please let me know if you have any other questions or concerns, and I'll get back to you right away. I'm always here to help. Take care and have a great day!

Highlighted
Level 1

Partial refund for a service Invoice

Thank you once again

 

I have added the bank fee to the refund receipt as a -£15 to reduce the total so the banking refund is matched and completed.

 

It still leaves the bank charge of £15 sitting in Banking waiting to be matched to something.

I click on Find Match and there are no options/expenses listed to match it to.

 

Do I need to do something different? There is an Add button, should I just use this?

It disappears has it gone to the right place? Where is it then allocated to?

 

Thank you

 

 

Highlighted
Moderator

Partial refund for a service Invoice

Hello JC50, 

 

Thanks for coming back to us, 

 

What you will need to do is go to the banking page and exclude the £15 transaction that is showing on the banking page, as this is already showing on the refund that you have matched up already. 

 

If you have any future quires please reach back out to us. ​​​​​​

Highlighted
Level 1

Partial refund for a service Invoice

Thank you but I don't know how to exclude an item in banking? I cant see an option to Exclude.

 

It shows in the review to either Add or Match it up.

If I chose Add where is it then recorded?

Highlighted
QuickBooks Team

Partial refund for a service Invoice

Hi JC50 If you select the box to the left of the transaction in the for review/banking page > batch actions > exclude.