Vendor Refund Check Deposited with Customer Checks. How do I move Vendor Refund into Undeposited Funds?

Let me help you record the vendors refund to get your balance correct, @lorihall62.

The steps you’ve taken are actually correct. However, something's missing when you enter the Bank Deposit, that’s why you’re unable to link it to the vendor credit.

Let me share the steps you need to complete the process, here’s how:

First, you need to create a Vendor Credit. To do that:

1. Click the Plus (+) icon and select Vendor Credit.
2. Enter the necessary information.
3. Click Save and close.

Then, create a Bank Deposit. Here’s how:

1. Click the Plus (+) icon and select Bank Deposit.
2. Enter the necessary information.
3. On the Add funds to this deposit section, select the vendor.
4. On the Account column, choose Accounts Payable (A/P).
5. Enter the amount.
6. Click Save and close.

Lastly, create a Check to link the two. Follow the steps below:

1. Click the Plus (+) icon and select Check.
2. Select the vendor’s name as the payee. Once you do that, the Deposit and the Vendor Credit will show on the right side of the screen.
3. Click Add on both Deposit and Vendor Credit.
4. Click Save and close.

Once you followed the steps above, you’ll be able to record the refund check successfully.

For more information on how to handle vendor credits and refunds, check out this article: Enter a credit from a vendor.

Keep me posted on how everything goes in the comment. I'll be here if you have any follow-up questions.