Why does "refund receipt" not reduce credit on customer's account?

GyqDcrt · ‎October 24, 2023

A customer paid for a service. I "Received Payment" to account for this.

Due to a series of unfortunate events, it turned out that the Invoice in question was already fully paid. It has been reconciled and the books were closed. The Invoice or the Payment can't be edited.

The overpayment was refunded to our customer.

I entered a "Refund Receipt" to account for the refund.

However, the credit on customer's account remains, and it cannot be attached to the refund in any way.

Now the customer has outstanding Credit AND a processed refund on their account. This is one of many cases, sadly. How do I correctly account for this regrettable situation now that I find myself here?

GyqDcrt · ‎October 25, 2023

I've spent hours on this issue, and wanted to share the fruits of my labor with the community.

An "Expense" tool can do everything* a "Refund Receipt" tool can do but better.

*"Refund Receipt" tool can send an email, but we don't use that service.

"Refund Receipt" can only be attached to BANK and P&L

"Expense" can be attached to BANK and whatever category you want, making it de facto better

Since Credit on Customer Account is part of Balance Sheet, and "Refund Receipt" tool is destitute and only affects P&L, it follows that

the only way to reduce a Balance on Customer Account, is to use a journal between Debtors() and Bank. And "Expense" tool is a limited version of such journal.

I will be using "Expense" to handle all refunds going forward, even though it sounds stupid.

I won't be the first or last to bemoan the naming convention that Quickbooks uses. I wish I could rename such tools locally to my business.

The only tool with a REFUND in its name, can't handle a refund. And in its stead we must use EXPENSE, which i must confess had a lowly job of accounting for utilities until now.

I'm not happy, since i will have to manually go through all the refunds i refunded and set up an "expense" instead. It's not intuitive, no pun intended, and i hope people avoid this particular trap.

View solution in original post

Ashleigh1 · ‎October 24, 2023

Hello GyqDcrt, thanks for posting on the Community page, so what you need to do is delete the refund receipt and do an expense to debtors, and then match it off at the bank this article has more information and all the steps you need to do. Record a customer refund in QuickBooks Online.

GyqDcrt · ‎October 25, 2023

I've spent hours on this issue, and wanted to share the fruits of my labor with the community.

An "Expense" tool can do everything* a "Refund Receipt" tool can do but better.

*"Refund Receipt" tool can send an email, but we don't use that service.

"Refund Receipt" can only be attached to BANK and P&L

"Expense" can be attached to BANK and whatever category you want, making it de facto better

Since Credit on Customer Account is part of Balance Sheet, and "Refund Receipt" tool is destitute and only affects P&L, it follows that

the only way to reduce a Balance on Customer Account, is to use a journal between Debtors() and Bank. And "Expense" tool is a limited version of such journal.

I will be using "Expense" to handle all refunds going forward, even though it sounds stupid.

I won't be the first or last to bemoan the naming convention that Quickbooks uses. I wish I could rename such tools locally to my business.

The only tool with a REFUND in its name, can't handle a refund. And in its stead we must use EXPENSE, which i must confess had a lowly job of accounting for utilities until now.

I'm not happy, since i will have to manually go through all the refunds i refunded and set up an "expense" instead. It's not intuitive, no pun intended, and i hope people avoid this particular trap.

kennedy442 · ‎September 10, 2024

Thank you for sharing this beautifully written explanation of how to record a simple customer refund in QuickBooks.

I too have spent hours attempting to record a simple refund to a customer's credit card. Every step required to record it in QuickBooks is non-intuitive (to me, at least).

I've written a procedure for my own records to remember your explanation each time this common bookkeeping event happens. Your explanation has been copy/pasted into our business's procedure, so we can be comforted to know that others (i.e., you) find QuickBooks' steps to be unnecessarily complicated.

John C · ‎September 10, 2024

Hi kennedy442 We appreciate your frustrations in regards to the steps to record a refund are lenghty. We've submitted your valued feedback to our developers and hopefully in the future they maybe able to implement an improved function that would be more simplistic.

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Why does "refund receipt" not reduce credit on customer's account?