How to Record a Cancelled Order

Hello 5h47on,

It would be a pleasure to help you record your cancelled order and refund in QuickBooks.

Both the outgoing and the returned money have to reflect in your bank register since that happened in your actual debit account. Therefore, we'll create a deposit to show the returned money, and so you can match it to the refund that shows in your bank feeds. As for the other outgoing funds, just match it with the bill or the expense you created when you paid your supplier.

First, create a deposit:

1. Click +New and choose Bank Deposit.
2. Select your debit account in the Account field.
3. In the RECEIVED FROM and ACCOUNT fields of the table, choose the supplier's name and the Creditors account respectively.
   
4. Enter the refund amount and enter a memo if you like.
5. Click Save and close.

Second, create a supplier credit. This corrects the inventory count of the item, and we'll link this to the deposit later on so your refund will not be overstated.

1. Click +New and choose Supplier Credit.
2. Select the supplier's name.
3. Go to the Item Details table and select the item you purchased, and then enter the amount in the intended field. The same amount that was returned to you. If there was a tax, you can include it as long as the total is the same as the deposited amount.
   
4. Enter a memo for your reference and click Save and close.

Third, link the supplier credit to the bank deposit via Cheque. This closes the supplier credit transaction and well not overstate your refund.

1. Click +New and choose Cheque.
2. Chose the supplier's name as the payee.
3. Leave the cheque number as blank since this isn't an actual cheque. It's just used to link the two transactions.
4. Add the deposit and the credit to it.
   
5. Click Save and close.

After doing all transactions above, you go to the supplier's Transaction List section to see their balance. You can also check your debit account to see the two debited and credited transactions we created. Then, you can proceed with matching them with your bank transactions.

Please go back to this thread if you still need help handling your refund.