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Level 3

Refund from vendor


i’ve received amount on my Credit Card account which is Refund for returned items. A vendor sent money back.

I opened Vendor credit memo but when I went to Match/Add transactions, bank transaction is showing me Transfer. 

Choosing option Match, is not showing issued Credit Memo as option to Match.

What I did wrong? How to record that transaction to Match correctly?

Thank you

Not applicable

Refund from vendor

You did well on creating a Vendor Credit, ZG10.

We just need to record few more transactions to complete the process. Let’s start by recording the deposit or the refund you’ve received from the vendor. Here’s how:

  1. Click the Plus icon at the top. 
  2. Select Bank Deposit. 
  3. Select the Account where you receive the refund under the Account field. 
  4. Enter the vendor’s name in the Received From field. 
  5. Enter the amount and date. 
  6. Select Accounts Payable under the Account column. 
  7. Click Save and close. 

Once done, link the vendor credit and the deposit. 

  1. Click the Plus icon at the top.
  2. Select Expense under Vendor. 
  3. Enter the vendor’s name under Payee. This will display the vendor’s available credit and deposit. 
  4. Click Add in the outstanding vendor credit and Add in the Deposit. 
  5. Select Save and close. 

You can then match the deposit you created in QuickBooks to the refund transaction from your bank. 

 Drop by again if there's something else you need.

Level 3

Refund from vendor

Thank you MikiD!

I am New in QB and trying my best to keep everything clear but many details are missing in my work. So thank you for this!

Please... I am getting Credit Card deposit from Costumer as prepayment so often.

I used to create a Deposit and Match Deposit with a bank transaction, and that is fine. But after, when all invoice amount is paid, the amount of Deposit is “somewhere in the air” :(( and gives me problems. I decided to Turn Off Automatic Credit Apply option today, before was On.


Do you maybe know simple way to record Prepayment/ Deposit paid by Credit Card 

from Costumer? It will help me a lot.

QuickBooks Team

Refund from vendor

Hi there, ZG10.


Thank you for posting here in the QuickBooks Community and for choosing QuickBooks Online to help running your business.


The deposit is treated as a liability to show that although your business is holding the money, it doesn't belong to you until it's used to pay for services.


You'll need to create a liability account to track the amount of the retainers you receive from your customers.


Here's how :


  1. Click the Gear icon, then select Chart of Accounts.
  2. Click the New button.
  3. Select Other Current Liabilities from the Account Type ▼ drop-down menu.
  4. On the drop-down arrow from the Detail Type, choose Trust Accounts - Liabilities.
  5. Enter a name for the account (ex. Trust Liabilities) or accept the suggested name.
  6. Select Save and Close.


Once done, you can now create a retainer item to select when creating an invoice or sales receipt for a deposit or retainer payment.


Follow the steps below:


  1. Select the Gear icon, then Product and Services.
  2. Click the New button.
  3. You'll be routed into the Product/Service information, then choose Service.
  4. Enter a name for the new product or service item (ex. Retainer).
  5. Select Trust Liability Account in the Income account ▼ drop-down menu.
  6. Select Save and close.


You can check this article for additional information on how to set up a deposit or retainer. Then, follow steps 4 and 5( steps 3 and 6 are optional): Record a retainer or deposit.


You can also refer to this article for some tutorials about the use of the different features in QuickBooks Online: QuickBooks Tutorials.


Please know that you're always welcome to post if you have any other concerns. Wishing you and your business continued success.

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