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jenuneekor
Level 4

Partial Refunds Impacting Inventory Levels

Hello!

 

Thanks in advance for any advice you can share!

 

We created and sent an invoice for one unit of our product to a customer without taking into consideration their discount percentage. The customer paid the invoice and I matched the transactions through Banking. We then realized the issue, and sent a check to the customer for the refund of that discount percentage.

 

I created a Refund Receipt initially. I put in 1 unit of that same product as the Item, and made the refund amount $700 (the overpayment). But I'm wondering if this will impact inventory levels. When I run a sales report, it shows a "-1" for # of units in that transaction but really we didn't get a unit returned, just a partial refund.

 

Would you please share your thoughts?

 

Thank you!

Jen

 

Solved
Best answer May 14, 2020

Best Answers
Rustler
Level 15

Partial Refunds Impacting Inventory Levels

@jenuneekor 

 

When you refund and include the item in the refund form, yes that restocks the item

 

what you need to do if the item is not returned and/or is not resalable is create a non inventory item that links to the refunds income account and use that instead.  You can type into the description block for the non inventory item on the refund form to say exactly what was returned unusable if you want

View solution in original post

5 Comments
MadelynC
QuickBooks Team

Partial Refunds Impacting Inventory Levels

Glad that you’ve visited the Community, @jenuneekor.


Let me share some information that helps you resolved your concern.


When you create a refund receipt in QuickBooks, it requires a quantity to tracked inventory items. So when you run a sales report, it reflects and impacts your inventory levels.


You can use the discount feature in QBO. Through this, you can easily create a discount percentage for your customer without affecting the inventory item.

 
You can turn this feature on from the Account and Settings, then you can continuously create an invoice to apply the discount. For more information about this, check this article: Add a discount to an invoice or sales receipt in QuickBooks Online.


I added an article you can use moving forward, about managing a report: Customize reports in QuickBooks Online.


I’m just a few clicks Jen in case you need more help. Have a good one.

jenuneekor
Level 4

Partial Refunds Impacting Inventory Levels

Hi MadelynC! Thank you so much for the quick response. I appreciate this plan for future discounted invoices. I'm wondering, though, for this particular instance, how to handle it since the overpriced invoice was already sent, then the payment was made to us, then we refunded. I don't know what the right steps are:

 

1) Modify the original invoice (with the amount that was too much) to be the correct amount? The payment was already matched to the invoice so now the invoice will show a balance due of -$700. Then when the refund check clears ($700) can I match that with the invoice ($-700 balance) to be a zero balance?

 

2) Leave the original invoice as-is, and create a refund receipt that somehow doesn't actually refund the product for inventory purposes. Not sure what the steps for this would be either

 

3) Any other solutions!

 

Would so appreciate your thoughts.

 

Thank you

ShiellaGraceA
QuickBooks Team

Partial Refunds Impacting Inventory Levels

Hi @jenuneekor,

 

You can link your refund receipt to the invoice to record the overpayment. Make sure you're refunding the exact amount you want to refund to your customer. Let me walk you through the process.

 

In your case, you'll want to edit the refund receipt to the correct or exact amount. After that, record the refund by following these steps.

 

  1. Go to +New, then Expense or Check.
  2. Select Payee, Payee account, and the bank account where you deposited the overpayment.
  3. On the Category column, select Accounts Receivable and Amount.
  4. Hit Save and close.
  5. Go back to +New, then Receive payment. Choose the same customer and fill out the fields.
  6. Under Outstanding Transaction, select the checkbox for the Expense or Check you created. 
  7. Tick Save and close.

Please see this article for more information about recording a customer refund in QuickBooks Online. I've also added handy article about how to handle a customer credit or overpayment in QuickBooks Online for your reference.

 

That'll do it. Should you need help with anything else, please don't hesitate to swing by anytime. We're just a comment away. Take care.

Rustler
Level 15

Partial Refunds Impacting Inventory Levels

@jenuneekor 

 

When you refund and include the item in the refund form, yes that restocks the item

 

what you need to do if the item is not returned and/or is not resalable is create a non inventory item that links to the refunds income account and use that instead.  You can type into the description block for the non inventory item on the refund form to say exactly what was returned unusable if you want

View solution in original post

jenuneekor
Level 4

Partial Refunds Impacting Inventory Levels

Thank you very much to all of you for your help! The idea of the non-inventory item to handle the refunds is perfect. I really appreciate all of your input.

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