I've been trying to properly record a refund from a 1099 vendor. I've followed the steps in the postings in help topic "Record a vendor refund in QuickBooks Desktop". However, when I get to "link the deposit to the bill credit", the bill credit does not show in "pay bills".
Obviously, I'm doing something incorrectly but I can't find the error.
I have no idea what intuits article says, IMO it often leaves a lot to be desired
If the vendor sent you a refund check, just deposit it, and use the mapped expense account for the 1099 as the source account for the deposit
If the vendor issued you a credit, then enter the vendor credit and use the mapped expense account for the 1099 as the account for the credit.
That would work but unfortunately the initial bill and accordingly the credit are billable to a customer. I have to show the credit to the customer account. And, i discovered that if I just invoice the initial bill and apply the credit as a payment, that screws up the vendor's 1099.
One of the main reasons why you’re not seeing the bill credit in the Pay bills window is that you’re not able to use accounts payable when creating the deposit.
You can confirm this by reviewing your audit trail. Here’s how:
Please reach us again if need anything else.
This was driving me crazy. I had the same problem. The official instructions are worthless. I finally found a CPA's website with the proper procedure. Here are the two critical pieces of information: First, you only need to enter a bill credit if the vendor account does not already show a credit balance. If you overpaid an existing bill, for example, your vendor will already show a credit balance; you don't need to enter a new bill credit. Second, and this is the critical piece, when you enter the refund check in the "Make deposit" window, do not enter the account that the original bill was expensed against. Instead, select "accounts payable" as the account. Now when you go to "pay bills" the vendor will show up, you click the vendor, name apply the credit and it will zero out the vendor balance.
Thanks for joining in this thread, @Ben-Alexander.
I appreciate you for sharing the detailed information on how you zero out the vendor's balance in QuickBooks Desktop. It will surely help other users who encounter the same issue. Please know that you're always welcome to post if you have any other concerns. The Community team will always here to help.
For future reference, you may want to visit this article: Record a vendor refund in QuickBooks Desktop.
Wishing you and your business continued success. Have a good one.