Hello there, @MaryAnn O. I can walk you through the process of how to categorize a vendor refund in QuickBooks Online (QBO).
If you have already recorded the amount of the overcharge as a Vendor Credit in QuickBooks, you can then make a bank deposit. Here's how:
- In your QBO account, click on +New, then select Bank deposit.
- In the Account dropdown menu, select the account where you got the refund.
- Fill out the following fields in the Add funds to this deposit section:
- Received from: Select the vendor who gave you a refund.
- Account: Select Accounts Payable. Important: You need to pick Accounts Payable so you can tie the refund to the vendor credit. This may seem a little strange, but it’s the best way to do this.
- Payment method: Enter the method your vendor used to refund you.
- Amount: Enter the amount of your refund.
- Once ready, click on Save and close.
After that, you can now link the bank deposit and the vendor you created by using Paybills. Let me walk you through the steps of how:
- In your QBO account, click on +New, then select Pay bills.
- Select the bank deposit you just created. You’ll see the amount of the vendor credit in the Credit Applied field. The Total payment should be US $0.00.
- Once done, click on Save and close.
For detailed information, kindly check out the third option of this article: Enter vendor credits and refunds in QuickBooks Online.
To categorize the vendor credit in QuickBooks, you can choose an expense account. If you're unsure about which specific account to link the vendor credit to, I suggest seeking guidance from your accountant for proper advice.
Additionally, you might want to consider reading this article that provides specific techniques for customizing your reports in QuickBooks to gain valuable insights: Common custom reports in QuickBooks Online.
Let me know if you require further assistance or have additional QuickBooks-related queries by leaving a comment below. I'm sure to circle back and provide the necessary help.
