Refund check from vendor

Thank you for the reply Jasro!  I have one more question.

I originally looked at this page, as you can see there are many different ways to enter the refund and all of them are long and complicated. https://quickbooks.intuit.com/learn-support/en-us/manage-vendors/record-a-vendor-refund-in-quickbook...

The one closest to what I am doing is "Scenario 3: The vendor sends a refund check that is not related to an existing bill".  But that has 3 different parts to it, and I only did the first part.  And you said only doing the first part is fine.  So I am just curious why all of those scenarios have so many other things to do when just entering the deposit is enough?

I ask because I am trying to learn the reasoning behind the actions to better understand the software and bookkeeping.  Thank you

Hi there, Electrician.

I'll provide details on why there's still another step to follow after entering a deposit while recording a refund from a vendor.

Yes, you right entering the deposit is enough. As mentioned above, you can deposit the refund and no need to enter a Bill or Bill credit. Just assure you entered a reason for the refund in the description field to track it easily when reconciling your accounts.

However, there are additional steps after entering a deposit to make sure your QuickBooks account balance stays accurate. Then, to offset the amount of refund. That's the reason you'll need to record a Bill Credit and link the Deposit.

You can click this article to view the recommended solution on how to fix AR and AP balances on the cash basis Balance Sheet: Resolve AR and AP balances on the cash basis Balance Sheet.

Please also refer to this article to see steps on how to transfer available credits from one vendor to another through the use of a temporary clearing account: Transfer and apply credit from one vendor to another in QuickBooks Desktop.

Please know that you're always welcome to post if you have any other concerns. Wishing you and your business continued success.

I am attempting to follow the lengthy directions provided under scenario #3, and I am stuck on step #2. 

When I go to "pay bills", there is no way to link the credit to a bill, because there is no open bill.  This would only work if there were an existing open bill... and there is not, nor should there be.  Where do I go from here? 

Step 2 indicates that I should 'Check the Deposit that matched the Vendor check amount'.  I see no way to do that. 

Thanks for joining us here today, @ccsmith14.

Good job on following step 1 in the article, you're almost there. In step 2, you'll have to record a credit to your vendor and then link it to the deposit in step 3. Let me guide you how.

1. Record a deposit of the vendor check (details are found in the article).
2. Create a bill credit for the same amount of your vendor check by going to Vendors, Enter Bills, and then the Credit radio button.
3. Then, link the deposit in step 1 with the vendor credit in step 2. Hover towards the Vendors menu.
4. Select Pay bills. Mark the deposit you've created from the list.
5. Tap the Set Credits button.
6. In the Apply Credits window, tick the box next to the vendor credit.
7. Click Done and then Pay Selected Bills.

I've added screenshots below to see how it looks like.

The detailed steps are found in this article: Record a vendor refund in QuickBooks Desktop.

If you need help with other tasks in QBDT for Mac, feel free to browse this link to go to our general topics with articles.

Reach out to me anytime if you still have questions or concerns with vendor refund. I'll be here for you. Take care and have a great rest of the week.

I meant to sat that I am hung up on step 3.. sorry about that. I entered the credit to the vendor (step 2) with no problem.  I also see the credit in the vendors profile. The problem is that it does not appear on the 'pay bills' screen. Credits that I issue to a vendor NEVER appear here like they do in your screenshot.  There has to be an actual bill for that vendor and I have to select the bill before the option to 'Set credit" can be selected. Please see the attached screen shot. I have selected the appropriate vendor from the drop down menu and you can see that nothing appears.

Thanks for reaching out back to us again, @ccsmith14,

When you follow the first step under Scenario 3, that deposit will create an open bill. I'll be providing some screenshots to show you the entire process, so you can review the transactions you've created.

First, when making the deposit of the vendor check, perform these steps:

1. Click the Banking menu and select Make Deposits.
2. Press OK if the Payments to Deposit window appears.
3. Now, in the Make Deposits window, select the Received from drop-down and choose the vendor name who sent you the refund.
4. For  the From Account drop-down, select an Accounts Payable account.
   
5. Add actual amount of the Vendor check in the Amount column .
6. Fill out any important information in the Deposit.
7. Hit Save & Close.

Next, let's record a Bill Credit for the amount of the Vendor Check. See this:

1. From the Vendors menu select Enter Bills.
2. Click on the Credit radio button to account for the return of goods.
3. Add the same Vendor name on the deposit we created earlier.
4. In the Expenses tab, enter the expense account you would normally use for refunds.
5. Then in the Amount column, input the appropriate amount for the account(s) you initially added.
   
6. Once done, press Save & Close.

Now, we will link the two entries using the Pay Bills option. Here's how:

1. Go to the Vendors menu, then select Pay Bills.
2. Check the deposit that matches the Vendor check amount under bills to be paid.
3. At the lower right section, click on Set Credits and apply the Bill Credit you created earlier then select Done.
   
   
4. When all set, choose Pay Selected Bills, then select Done.

Regardless, there are different scenarios that requires specific set of steps to account for a vendor refund. I would still recommend checking this article for other ways to record them in QuickBooks: Record a vendor refund in QuickBooks Desktop

Please tap me again for any updates or if you need further help. I'll be more than happy to share some more information to help you with vendor credits. Have a good one!

Thank you! I see what I did wrong now... When entering the deposit I was crediting the original expense account, rather than AP, and that is why the bill did not appear.  

Hello,

I followed all the steps. 

However the credit does not show up in Pay Bills.  I am so happy that you showed screen shots.  I thought I was going crazy that the instructions said to check deposit that matches Vendor check amount.

My pay bills page does not do that.

I recorded the deposit.  I recorded a bill credit.

It does not show up in the Pay Bills screen.

This is probably an old post, but maybe it will get to someone.

Thanks,

Joanne       [email address removed]

I appreciate the steps you've performed, Wishfull2.

Let me share additional information to help you go over your credit and apply it to your vendor bill in QuickBooks Desktop.

You'll have to make sure you select the Accounts Payable account for your deposit to record your vendor's credits successfully. Here's how to accomplish the tasks:

1. Go to Banking.
2. Select Make Deposits.
3. Under RECEIVED FROM, select your vendor.
4. On the FROM ACCOUNT column, select your Accounts Payable account.
5. Enter the amount of your vendor's credit.
6. Click Save & Close.

If the transaction still doesn't show up in the pay bills screen, let's ensure you have the latest version of QBDT installed. Then, the Verify/Rebuild utility to detect the data damage.

Here's how:

1. Click File.
2. Go to Utilities, then choose Verify Data.
3. If QuickBooks detected no problems, there's no further action needed. If you receive a message, "Your data has lost integrity," the file is damaged. Just continue to Rebuild Data to correct the problem.
4. When you Rebuild Data, you'll receive a message to back up your company file, just click OK. The utility starts as soon as the backup is finished.
5. Click OK when you get the message "Rebuild has completed."
6. Run Verify Data again to check for remaining data damage.

Once done, restart your computer and check the vendor credits again.

Also, Also, I would still recommend checking this article about the different scenarios that require a set of steps to account for a vendor refund: Record a vendor refund in QuickBooks Desktop.

Please let me know if you have any other questions about vendor credits, I've got your back.

My version of quickbooks desktop for mac 2020 does not have a "set credit" radio button on the pay bills screen?

Hello hardymac!

You can record a credit in QuickBooks Desktop for Mac. Let me help you!

Aside from the open bills, the Pay Bills page is where you can see the credits if you want to apply them to a bill. You can create a credit on the Enter Bills page. Go to the Vendors menu, select Enter Bills, and you'll see the Credit radio button.

In addition, you can check these links. These will explain how to record refunds from vendors and how to pay your bills in QuickBooks Desktop:

• Pay bills in QuickBooks Desktop

• Record a vendor refund in QuickBooks Desktop

Leave a message again below if you have additional vendor-related concerns. Take care!

I had a refund check for a vendor because we had duplicate bills and both sets of bills were paid. The bills and payments were in the previous fiscal year. Now, I am entering this deposit. If I just deposit the check, will my expenses be overstated?

Like the person that wrote the original question, I tried some of the other suggested solutions, but they do not work for me in QB Enterprise Nonprofit 22.0 desktop. 

Your solution seems so much simpler and better. Am I missing something?

Hello there, @Breeeze. I'd be happy to share some details on recording vendor refunds in QuickBooks Desktop (QBDT).

It will affect the expenses for the current fiscal year. However, you can zero it out.

You can deposit the returned amount to the account that was used upon creating the check. This way, the expense will be zeroed out.

When creating the deposit, you may follow the date of when the check was generated. Ensure to select the correct expense account to where the funds will be deposited to. It will zero out the expenses posted.

If you want to follow your bank statement, you may use the date when the amount was returned to your account upon depositing the funds. It can make your reconciliation easier.

I'd also recommend reaching out to an accounting professional to assess what tax basis you have and to ensure that the data entered on the affected accounts are correct to avoid tax issues in the future.

I've got an article to know more info about the scenario-based steps you can follow when entering a vendor refund: Record a vendor refund in QuickBooks Desktop.

Please don't hesitate to reach back out if you have other questions or any updates with your accountant about this topic. I'm all ears to any response. Take care!

This statement was the most helpful in the entire thread.

I use QBO and so I do not have the same options as discussed in Scenario 3 step 2.

Can you provide detailed example of how to handle this scenario in QBO?  I deposited the checks from the vendor and want to make a bill credit.  Should I be using Vendor Credit 1st and then create a bill?  I do not have a radio button in QBO.

Here, nulsenc.

You can record the vendor credit in QuickBooks Online by following these steps:

1. Select + New.
2. Select Vendor credit or Receive vendor credit.
3. In the Vendor ▼ dropdown, select your vendor.
4. Depending on how you record purchases with this vendor, enter the Category details or Item details. Usually, this is the category, product, or service you’re getting a credit for.
   Note: If you choose an inventory item, QuickBooks will put it back into inventory. If the item is defective or if you don’t want it added back to inventory, you can make an inventory adjustment.
5. Select Save and close.

Once done, you can apply a vendor credit toward any open or future bill. When you’re ready to use the credit, here’s how to do it:

1. Select + New.
2. Select Pay bills or Pay bill.
3. Select a bill for your vendor from the list. You'll see the available credit with this vendor in the Credit Applied field.
4. Complete the rest of the fields like you normally do.

For more details, please see this article: Enter vendor credits and refunds in QuickBooks Online.

Please keep us posted if you need additional assistance if you need additional assistance with the process. We're always here to help you out. 

I have been trying to figure this out too. I was also applying it to the expense account. 

Hi!
The Bank cleared my 1st property tax payment, but the Vendor sent me a refund check. So, upon receipt of the refund check, I deposited it as received from the Vendor. It got recorded on the General Ledger but not showing on the Vendor Ledger. How do I fix this?

We're glad to see you joining in on this thread, Berj17. Let me help ensure vendor refunds are accurately entered into your desktop account.

With QuickBooks, recording vendor refunds that are not related to an existing bill requires us to create a Deposit of the vendor check received. Let's ensure to review the account type selected so the transaction will reflect on the Vendor Ledger. Then, you'll need to record a Bill credit for the amount of the vendor check. To do this:

1. Go to the Vendors menu, then select Enter Bills.
2. Select the Credit radio button to account for the return of goods.
3. Enter the Vendor name.
4. Select the Expenses tab and enter the Accounts you would normally use for refunds. 
5. In the Amount column, enter the appropriate amount for each Account (the amounts may have to be prorated.)
6. Select Save & Close.

Once done, you can follow Scenario 3-Step 3: Link the Deposit to the Bill Credit outlined in this article: Record a vendor refund in QuickBooks Desktop.

Additionally, we recommend contacting your accounting professional to further guide you in which posting accounts are needed to use when recording this transaction. This ensures all your financial data are accurate and balanced.

Moreover, you may want to run specific payroll summary reports to help you track and view your payroll totals, taxes, and other deductions.

We've got you covered anytime you have additional queries when handling vendor transactions in your account. Just let us know in the comments below, and we'll be sure to provide further help. Take care.

This link will walk you through the process to refund a check from a vendor.  There is also a link on how to record refunds in your product.  Hope this helps:  https://quickbooks.intuit.com/learn-support/en-us/vendor-credits/enter-a-refund-from-a-vendor/00/335...