My supplier raises a proforma invoice that includes a deposit. They refund the deposit. How do I record this on quickbooks?

Hi,

If the supplier account is showing a balance of (£240.00) due to a refund how do you post this transaction onto the supplier account as the method being shown using a bank deposit means the refund does not sit on the supplier account which means it is not showing all the transactions of that supplier.

Hi sdodyer, thanks for joining this thread

Following steps 4 & 5 ensures the bank deposit posts to the supplier's account. Please check that the correct supplier is chosen in the Received from field and that Accounts payable is selected in the Account field. 

Accounts payable is the default account for tracking transactions related to your suppliers in QuickBooks Online, but this may be named as Creditors instead. If you need any further help, get back to us below!

Hi,

Unfortunately that did not work form. The situation I have is that I paid a supplier and on account payment of £1,240. After the job I received an invoice for £1,000 and then a couple of days later a refund for £240. So my supplier account is sitting there with a (£240) balance on it (on account £1,240 - invoiced £1,000). Doing what you suggest does match my outstanding £240 off. Why can't you just have an option to "receive/refund payment against either a credit note or an overpayment on the supplier account?

Hi there, @sdodyer.

Allow me to share some information as to why you can't have the option to receive/refund payment against either a credit note or an overpayment on the supplier account in QuickBooks Online. In QuickBooks Online, to enter the refund depends on how you record your purchases. 

QuickBooks Online, which directly allows for receiving or refunding payments against a credit note or an overpayment on a supplier account, is not yet available. 

However, there may be a workaround to achieve this. One possible solution is to apply the credit note or overpayment to a future invoice for the same supplier. This can be done by creating a supplier credit and applying supplier credits to a bill to effectively reduce or adjust the amount owed for that invoice.

Furthermore, please seek an accountant's guidance to avoid messing up your transactions.

I'm also adding these helpful modules you can browse about how and when to give a credit note or delayed credit to customers: Create and apply credit notes or delayed credits in QuickBooks Online.

Feel free to post if you have other concerns with receiving/refunding payments in QuickBooks in general. We're here to help you further. Keep safe!

Hi,

So are you telling me that there is no way within Quickbooks to correctly input the transaction that I need to input?

To remind you I made a payment of £1,240 in advance of an equipment hire which included a £240 deposit. I then, after the hire, received an invoice for £1,000 and then later a refund into my account of £240.

I posted the payment against the invoice which means I am currently sitting with an open amount on the supplier account of (£240). 

How do I match the refund with the supplier account?

Hi sdodyer, the transaction can be recorded in full by following the steps below. 

Firstly, post the £1240 advance payment as a payment on the Supplier's account. 

To do this, create an Expense (+ New transaction > Expense) with the Date (that the advance payment was made), Bank account and Supplier selected in the appropriate fields. On the Category details line, change the Category to Creditors (or Accounts receivable), then enter the Amount and relevant VAT code & Save.  

When the invoice is received, create a Bill for £1000. Select Make payment on the bill and tick the Expense under Credits to apply this as the payment. Once saved, this will leave the deposit amount as an open balance on the Suppliers account.

To record the deposit received back from the Supplier, create a Bank deposit. On the deposit, select the Bank account and Date (that the deposit refund was received), and scroll to Add funds to this deposit. Choose the Supplier in Received from, Creditors under Account and enter the Amount and VAT (if applicable).

After saving, go back to the Suppliers page and select New transaction > Cheque. On the panel that appears on the right of the screen, Add the Expense and Bank deposit. The total value will show as zero (0.00) - save & close the transaction to view the Suppliers account.