Entering a refund as an account credit

Sorry, the rest of this got cut off for some reason.

I know all dealers have an account, but I have never used it, as I pay for all my parts up front.

How do I enter this into Quickbooks properly, so it shows the credit on my account?

That's okay, @QualGenSer, and I appreciate the information you have. You can create a bank deposit affecting the Accounts Receivable account if the invoice was partially paid. Let me explain the details.

Based on your scenario, it seems the invoice was not fully paid. In this case, you can create a bank deposit affecting the Accounts Receivable account and link it to the partially paid invoice.

Here's how:

1. Go to the Banking menu and select Make Deposit.
2. If the Payments to Deposit window appears, select OK.
3. In the Make Deposits window, select the Received from dropdown and choose the correct customer.
4. In the From Account dropdown, select the appropriate Accounts Receivable account.
5. In the Amount column, enter the actual amount of the check.
6. Enter additional details if needed.
7. Select Save & Close.
   
   

To apply the credits, go to the Customer menu and select Receive Payments. Choose the customer from the Receive From dropdown, then click Apply Credits.

If you mean something different by chargebacks or the credits you wish to show on your account, please let me know in this thread.

Additionally, you can check out these articles for more details on managing customer and vendor credits in QuickBooks Desktop:

• Give your customer a credit or refund in QuickBooks Desktop for Windows
• Record a vendor refund in QuickBooks Desktop
  
  

Furthermore, if you need to pull up a report with your financial data in QuickBooks, refer to the article: Run and customize reports in QuickBooks Desktop.

Feel free to reply in this thread if you have additional questions or need clarification about managing refunds and credits in QuickBooks. I'm here to help.

The actual invoice was fully paid according to the invoice. I had inadvertently put the wrong part number on the invoice, so they paid me for the invoice amount. The problem was that the part number that should have actually been put on the invoice was a more expensive part. 

Instead of just cutting me a second check for the difference, they just put a credit on account for me. I've never had an account with them before, so there is nothing to reflect that in QB.

Thank you for sharing the details of your situation, QualGen. Recording transactions for a company that functions as a vendor and a customer can be challenging. Let's work together to simplify this process and ensure your records in QuickBooks accurately reflect your transactions, including the account credit for the warranty part.

In your case, you can create a vendor credit in your QuickBooks Desktop, which will appear as a credit on your account.

The created vendor credit can be applied to future purchases from that vendor, allowing the amount of the credit to offset future payments, thus simplifying the accounting process.

I'd still recommend consulting your accountant for guidance throughout this process and for additional assistance. Working with an accountant is essential to ensure your financial records are accurate and up-to-date, as they can offer expert advice on best practices for bookkeeping.

Here's how to set this up:

1. Head to the Vendors menu, then select Enter Bills.
2. Click the Credit button.
3. In the Vendor field, choose the vendor.
4. In the Credit Amount field, enter the amount. 
5. Select the Expense tab.
6. In the Account field, select the account used on the original Bill.
7. Hit Save & Close.

If you prefer not to record the credit in your QuickBooks account, ensure you have an internal agreement with your vendor. Then, when you receive reimbursement, you can create a sales receipt to account for the transaction.

Moreover, you can run a vendor report in the future. This helps you track expenses, understand buying habits, ensure timely payments, and maintain accurate records.

I appreciate your engagement as we work through this together. If you have any further questions or need assistance regarding vendor credits or other QuickBooks features, please don't hesitate to reach out. I'm dedicated to helping you manage your finances effectively. 

@QualGenSer 

Are you going to update the original invoice to reflect the correct part number?  I think you need to in order to keep your inventory accurate as well as your COGS.  Updating the original invoice with the correct part number will create a balance due on the invoice that equals the amount of your credit with your vendor/customer.  You can then move that amount to an A/P credit by doing the following: 

1) Create a bank account in QB called 'Clearing Account'.

2) Receive payment on the invoice for the outstanding balance (the amount of your vendor credit) and deposit into the bank Clearing Account.  This closes out the invoice.

3) Create a vendor credit.  Select 'Clearing Account' on the expense tab and enter the amount of the credit.

You now have the original invoice with the proper item closed and you have a credit with that vendor for the amount you undercharged.

If you don't update the original invoice, you can create a vendor credit but I'm not sure what accounts to select on the credit because the original invoice has the incorrect part number which created a discrepancy in your inventory/COGS and how you correct that will dictate what accounts should be entered on the vendor credit.  Better to update the original invoice IMO if it's not from a closed period.