Customer refund by check

Hello there, @TammieMB.

I'm here to help you record a customer refund in QuickBooks Online.

If you want to refund for a paid invoice, follow the steps below:

Step 1: Enter a credit memo

1. Use the + New button.
2. Choose a Credit memo.
3. In your Customer drop-down, pick a customer's name.
4. Enter any necessary details.
5. Select Save and Close.

Note: If the customer has overpaid, you do not need the credit memo as you will already have an unapplied credit that acts as your credit memo.

Step 2: Make the refund

1. Go to + New and select Expense.
2. In the Payee field, select or enter the desired customer.
3. In the Payment Account field, select the bank the money is being refunded.
4. In the Category field, select the Debtors account (Accounts receivable).
5. In the Amount field, enter the amount of the refund.
6. In the Tax field, select the appropriate Tax (not inclusive/exclusive of tax) and hit Save.
7. Next, go to + New and select Receive payment.
8. Add the Customer and select the Payment method and Deposit to.
9. The balance should be 0 as they will cancel each other out, then select Save and Close.
10. If you have Online Banking, go to Transactions, then Bank Transactions (Take me there). Then match the record you found.

If you want to refund for goods or services for a dissatisfied customer or a customer's overpayment, you can read this article and go to the bottom part for the steps: Record a customer refund in QuickBooks Online.

I'm also adding this article to help you categorize transactions in QuickBooks Online: Categorize online bank transactions in QuickBooks Online.

Don't hesitate to comment below if you need further assistance recording a customer refund in QuickBooks Online. I'm always here to help. Have a great day.

Thank you, but this is not helpful. I’ve already looked this up and it provides too many choices and I’m unsure of the correct one for my situation. 10 months ago a customer paid an invoice with a credit card. I need to refund PART of that invoice and cannot do a partial refund in QBO now at this late date. I need to write a check. Do I need to create a Refund Receipt AND a check? I’ve done that but it doesn’t look right so I may need to delete them. I need specific help for my situation to record this correctly in my books, please and thanks. 

Good afternoon, @TammieMB. 

I appreciate you coming back and giving some additional information about how you're needing to record a refund to your customer with a check. 

With the details you gave, I recommend consulting your accountant to be sure of which route would be best for you. 

If you have any other questions after speaking with your accountant, don't hesitate to ask. Have a wonderful day! 

I'm curious what you ended up doing and the steps needed to complete it? I'm in a similar situation. Thanks!

@Amanda13617 

What is the reason for the refund?  Overpayment?  Product return?  Other?  The reason will dictate the best way to record it.  

For simplicity, I think it would be considered "product returned." 

Hi, I'm in a similar situation where I need to refund an award to a grantor (aka customer). We received grant monies that we are not going to use. I'm wondering, in what scenarios should I use a "Refund Receipt" instead of a "Credit Memo" (as mentioned in the guidance provided by @Ethel_A)?

Hello there, @MK_APWC.

Let me help you clear things up on how a credit memo and a refund receipt work in QuickBooks Online. A refund receipt is issued when a customer requests an immediate monetary return, whereas a credit memo is provided when a customer prefers to have a credit applied to their account for use in future transactions.

You can follow the steps below to refund your grantor (AKA customer).

1. Select the +New icon. Then, click Refund Receipt.
2. Choose the customer that you want to refund.
3. Choose a Payment method and select an account for the refund in the Refund From field.
4. Click Save and new.

For more information, you can refer to the following articles:
Record a customer refund in QuickBooks Online
Create and apply credit memos or delayed credits in QuickBooks Online

I also recommend consulting your accountant for further assistance on accurate recordkeeping. If you don't have one, you can a professional through the QuickBooks ProAdvisor page.

Should you have any questions regarding credit memo, refund receipt, or other QuickBooks-related issues, please leave a reply below. The Community is always available to assist you 24/7.