Record a vendor refund in QuickBooks Desktop

This article will guide you in recording refunds you received from a vendor. Choose the appropriate scenario and follow the recommended steps to record the refund in QuickBooks.

Scenario 1: The vendor sends you a refund check for a bill that is already paid

1. Record a Deposit of the vendor check:
   1. Go to the Banking menu, then select Make Deposits.
   2. If the Payments to Deposit window appears, select OK.
   3. In the Make Deposits window, select the Received from dropdown and choose the vendor who sent you the refund.
   4. In the From Account dropdown, select the appropriate Accounts Payable account.
   5. In the Amount column, enter the actual amount of the Vendor check.
   6. (Optional) Enter a memo, check number, payment method, and class.
   7. Select Save & Close.
2. Record a Bill Credit for the refunded amount:
   1. From the Vendors menu, select Enter Bills.
   2. Select the Credit radio button to account for the return of goods.
   3. Enter the Vendor name.
   4. Select the Expenses tab and enter the Accounts on the original bill.
   5. In the Amount column, enter the appropriate amount for each Account (the amounts may have to be prorated).
   6. Select Save and Close.
3. Link the deposit to the Bill Credit:
   1. From the Vendors menu, select Pay Bills.
   2. Check the Deposit that matches the Vendor check amount.
   3. Select Set Credits and apply the Bill Credit you created earlier then select Done.
   4. Select Pay Selected Bills, then select Done.

Scenario 2: The vendor sends you a refund check for returned inventory items

1. Record a Deposit of the vendor check:
   1. Go to the Banking menu, then select Make Deposits.
   2. If the Payments to Deposit window appears, select OK.
   3. In the Make Deposits window, select the Received from dropdown and choose the vendor who sent you the refund.
   4. In the From Account dropdown, select the appropriate Accounts Payable account.
   5. In the Amount column, enter the actual amount of the Vendor check.
   6. Enter the remaining information in the Deposit.
   7. Select Save & Close.
2. Record a Bill Credit for the returned items:
   1. Go to the Vendors menu, then select Enter Bills.
   2. Select the Credit radio button to account for the return of goods.
   3. Enter the Vendor name.
   4. Select the Items Tab.
   5. Enter the returned items with the same amounts as the refund check.
   6. Select Save & Close.
3. Link the deposit to the Bill Credit:
   1. Go to the Vendors menu, then select Pay Bills.
   2. Check the Deposit that matches the Vendor check amount.
   3. Select Set Credits and apply the Bill Credit you created earlier then select Done.
   4. Select Pay Selected Bills, then select Done.

Scenario 3: The vendor sends a refund check that is not related to an existing bill

Examples include rebates, reward incentives, refunds, reimbursements, or checks issued by a vendor to cash out an existing credit.

1. Record a Deposit of the vendor check:
   1. Go to the Banking menu, then select Make Deposits.
   2. If the Payments to Deposit window appears, select OK.
   3. In the Make Deposits window, select the Received from dropdown and choose the vendor who sent you the refund.
   4. In the From Account dropdown, select the appropriate Accounts Payable account.
   5. In the Amount column, enter the actual amount of the Vendor check.
   6. Enter the remaining information in the Deposit.
   7. Select Save & Close.
2. Record a Bill Credit for the amount of the Vendor Check:
   1. Go to the Vendors menu, then select Enter Bills.
   2. Select the Credit radio button to account for the return of goods.
   3. Enter the Vendor name.
   4. Select the Expenses tab and enter the Accounts you would normally use for refunds.
      Note: If you are not sure which account to select, Intuit recommends contacting your accounting professional.
   5. In the Amount column, enter the appropriate amount for each Account (the amounts may have to be prorated.)
   6. Select Save & Close.
3. Link the Deposit to the Bill Credit:
   1. Go to the Vendors menu, then select Pay Bills.
   2. Check the Deposit that matches the Vendor check amount.
   3. Select Set Credits and apply the Bill Credit you created earlier then select Done.
   4. Select Pay Selected Bills, then select Done.

Scenario 4: A vendor sends a refund check on behalf of the original vendor

1. Create a deposit for the vendor who sent the refund check:
   1. Go to the Banking menu, then select Make Deposits.
   2. If the Payments to Deposit window appears, select OK.
   3. In the Make Deposits window, select the Received from dropdown and choose the vendor who sent you the refund.
   4. In the From Account dropdown, select the appropriate Accounts Payable account.
   5. In the Amount column, enter the actual amount of the refund.
   6. (Optional) Enter a memo, check number, payment method and class.
   7. Select Save & Close.
2. Create a Bill for the Amount of the Deposit and apply it to the Deposit:
   1. Go to the Vendors menu, then select Enter Bills.
   2. In the Vendor field, select the vendor who sent the refund.
   3. In the Amount Due field, enter the amount of the refund.
   4. Select the Expense tab.
   5. In the Account field, select a Wash account. (Example would be an expense account).
   6. In the Amount field, enter the amount of the refund.
   7. Select Save & Close.
   8. Go to the Vendors menu, then select Pay Bills.
   9. Select the Bill and select Set Credit.
   10. Select the Credit and select Done.
   11. Select Pay Selected Bills, then select Done.
3. Create a Credit for the Original Vendor:
   1. Go to the Vendors menu, then select Enter Bills.
   2. Select the Credit radio button.
   3. In the Vendor field, select the vendor who sent the refund.
   4. In the Credit Amount field, enter the amount of the refund.
   5. Select the Expense tab.
   6. In the Account field, select the account used on the original Bill.
   7. In the Amount field, enter the amount of the refund.
   8. Select Save & Close.
4. Create a Bill for the Amount of the Credit affecting the Wash Account and apply the Bill to the Credit:
   1. Go to the Vendors menu, then select Enter Bills.
   2. In the Vendor field, select the vendor who sent the refund.
   3. In the Amount field, enter the amount of the refund.
   4. Select the Expense tab.
   5. In the Account field, select a Wash account. (Example would be an expense account).
   6. In the Amount field, enter the amount of the refund.
   7. Select Save & Close.
   8. Go to the Vendors menu, then select Pay Bills.
   9. Select the Bill and select Set Credit.
   10. Select the Credit and select Done.
   11. Select Pay Selected Bills, then select Done.

Scenario 5: The vendor sends you the refund as a credit card credit

1. Go to the Banking menu, then select Enter Credit Card Charges.
2. From the Credit Card dropdown, select the credit card account.
3. Select the Refund/Credit radio button.
4. Choose the appropriate Vendor name and enter the Date, Ref No, and Amount.
5. Enter an appropriate memo to describe the transaction.
6. If you returned Items, select the Item tab and enter the Items and Amounts from the refund.
7. If the refund does not have Items, select the Expenses tab, select the appropriate Accounts and enter the Amount.
8. Select Save & Close.