Good day, @jghareeb777.
You're on the right track on how to record refunds in QuickBooks. Just make sure to choose the appropriate Accounts Payable account in the From Account drop-down.
To start, let's first record a deposit of the vendor check, then record the bill credit for the amount of that vendor check. Here's how:
- In the Banking menu, select Make Deposits.
- Click OK as soon as the Payments to Deposit window appears.
- In the Make Deposits window, select the Received from the drop-down and choose the vendor who sent you the refund.
- In the From Account drop-down, choose Accounts Payable account.
- In the Amount column, enter the actual amount of the Vendor check.
- Enter all necessary information in the Deposit.
- Select Save & Close.
Record a Bill Credit for the amount of the Vendor Check
- Go to the Vendors menu, then select Enter Bills.
- Click the Credit radio button to account for the return of goods.
- Enter the Vendor name.
- Select the Expenses tab and enter the Accounts you would normally use for refunds. If you aren't sure which account to select, contact your accounting professional for assistance.
- In the Amount column, enter the amount for each Account.
- Select Save & Close.
Once done, you can now link the Deposit to the Bill Credit.
- In the Vendors menu, select Pay Bills.
- Check the Deposit that matches the Vendor check amount.
- Select Set Credits and apply the Bill Credit you've created earlier.
- Click Done.
- Select Pay Selected Bills, then click Done.
You can check this link for your reference on how to record vendors refund: Recording refunds you received from a vendor.
I'm also adding here some articles that you can use about managing the receivables and parables of your business:
Please let me know if you have any other concerns in QuickBooks. I'm here to lend a hand. Take care always.
