Donation (sales receipt) refund in QB Premier Nonprofit Edition 2016

Thanks for getting in touch with the Community, MikahKreko. I appreciate your detailed information.

You can record a refund in QuickBooks from the Create Credit Memos/Refunds screen. Initially you'll need to create a credit memo.

Here's how:
 

1. In your top menu bar, go to Customers, then Create Credit Memos/Refunds.
2. From the Customer:Job drop-down list, choose a customer.
3. Specify which items you're giving a credit for.
4. Select Save & Close.

In your Available Credit window, pick Give a refund and click OK. You can issue the refund in cash or a check. If your customer used a credit card, you can refer to our Void or refund customer payments article.

In the event you refunded your customer with cash or a check, you can refer to Option 2: Give a refund section in our Give your customer a credit or refund article.

Please feel welcome to send a reply if there's any additional questions. Have a wonderful Thursday!

Creating the credit memo is easy enough BUT the credit card was not refunded through QB so I'm not sure how to apply the credit memo. When the Available Credit window comes up, which option do I need to select? 

Thanks for reaching out with additional details about applying a credit memo for a donation refund in QuickBooks Desktop, @MikahKreko.

To start, from the given options on your screen, you need to choose the Give refund in the Available Credit window in QuickBooks Desktop. This ensures accurate record-keeping by documenting the transaction, even if the credit card refund was processed outside of QuickBooks. This action maintains customer account accuracy, and aligns with standard accounting practices and future reconciliations.

In addition, credit memo is an internal document provided by a seller that indicates a reduction in the amount a buyer owes, usually applied to future purchases or adjustments. In contrast, a refund involves returning money directly to a customer, typically when a product is returned or a service is canceled, affecting cash flow by sending funds back via the original payment method. While credit memos adjust account balances, refunds directly impact cash flow.

Moreover, you might find it helpful to review this article, which serves as a guide for tracking customer transactions in QuickBooks Desktop: Get started with customer transaction workflows in QuickBooks Desktop.

Feel free to reach out if you have any further concerns about applying a refund or credit memo transactions in QuickBooks Desktop. Just leave a comment below, and I'll be happy to assist with the information you require.

Okay. Makes sense! Now when I get to the 'issue a refund' screen it asks how I want the refund issued. It defaults to check, but should I change it to cash or a credit card option? 

Thank you for replying, @MikahKreko. I'm chiming in on this thread to help you further.  You recorded a donation as a sales receipt in January and subsequently issued a refund to the donor’s credit card. You're correct – it's appropriate to change it to credit card (CC). I'd be glad to provide more details on this and guide you through the steps.

Refunds typically don't appear as separate transactions on your bank statement, and are instead grouped with other CC transactions processed on the same day. Therefore, recording it as a CC refund in QuickBooks will align your books with your actual bank transactions.

Since you've created the credit memo, you can follow these steps:

1. Go to the Customers menu and click Customer Center.
2. Select the customer profile and double-click on the credit memo.
3. Ensure that in the Item column, you've chosen the name of the item being returned.
4. If you charged sales tax when you sold the item, be sure the item is marked as taxable also.
5. On the top portion, select Use credit to give refund.
6. In the Issue this refund via field, select the type of credit card you're using for the refund.
7. Make sure the Process credit card refund when saving checkbox is not selected.
8. Click OK.
   

To verify everything is accurately recorded, consider running a Profit and Loss Detail report. Refer to this guide for the detailed steps: Customize company and financial reports.

When you're ready to reconcile your bank account, I'm adding this article as a guide: Reconcile an account in QuickBooks Desktop.

I hope this helps clear up the process for issuing a refund via credit card. If you have any more questions or need further assistance, please feel free to return to this thread. We’re here to support you every step of the way. Take care!