I have a bill for a vendor in the amount of $6000. I paid $3000 as a deposit and the vendor deposited the check about 2 months ago. The vendor just refunded the $3000 because the event we were paying for has been delayed and the vendor does not want to hold our deposit indefinitely. I need to record this refund of the deposit but I also need the Bill to reflect the original $6000 as we will have to pay that full amount in the future.
Thank you for getting back here in the Community, @Mfong12.
Allow me to share some steps to enter a vendor credit in QuickBooks Online (QBO). You can record a vendor credit and make sure it hits the expense account. Then, enter a bank deposit from the refund check you receive and link both transactions using Pay Bills. Let me guide you through the process.
To record vendor refund in QBO, you may follow these steps:
Press on the + New button at the left pane.
Select on Vendor credit.
In the Vendor drop-down, choose your vendor.
Depending on how you record purchases with this vendor, enter the Category details or Item details. Usually, this is the category, product, or service of the credit.
Hit on Save and close.
Then, record a bank deposit to the refund check.
Click the + New button and choose Bank Deposit.
Select the appropriate credit card account where you got the refund.
In the Add funds to this deposit section, fill out the following fields.
Received from: Select the vendor who gave you a refund.
Account: Select Accounts Payable. Important: You need to pick Accounts Payable so you can tie the refund to the vendor credit. This may seem a little strange, but it’s the best way to do this.
Payment method: Enter the method your vendor used to refund you.
Amount: Enter the amount of your refund.
Select Save and close.
Once done, you can now link the bank deposit to the vendor credit using Pay Bills. To ensure your vendor expenses are accurate.
Click the + New button, then select Pay Bills.
Choose the bank deposit you created. See the amount of the vendor credit in the Credit Applied field. The Total payment should be $0.00.
Hit Save and close.
For your reference, I'm also adding here some articles that you can visit about entering a vendor credit and applying them to your transactions: