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Record a vendor refund in QuickBooks Desktop
by Intuit•4• Updated 4 months ago
This article will guide you in recording refunds you received from a vendor. Choose the appropriate scenario and follow the recommended steps to record the refund in QuickBooks.
Scenario 1: The vendor sends you a refund check for a bill that is already paid
- Record a Deposit of the vendor check:
- Go to the Banking menu, then select Make Deposits.
- If the Payments to Deposit window appears, select OK.
- In the Make Deposits window, select the Received from dropdown and choose the vendor who sent you the refund.
- In the From Account dropdown, select the appropriate Accounts Payable account.
- In the Amount column, enter the actual amount of the Vendor check.
- (Optional) Enter a memo, check number, payment method, and class.
- Select Save & Close.
- Record a Bill Credit for the refunded amount:
- From the Vendors menu, select Enter Bills.
- Select the Credit radio button to account for the return of goods.
- Enter the Vendor name.
- Select the Expenses tab and enter the Accounts on the original bill.
- In the Amount column, enter the appropriate amount for each Account (the amounts may have to be prorated).
- Select Save and Close.
- Link the deposit to the Bill Credit:
- From the Vendors menu, select Pay Bills.
- Check the Deposit that matches the Vendor check amount.
- Select Set Credits and apply the Bill Credit you created earlier then select Done.
- Select Pay Selected Bills, then select Done.
Scenario 2: The vendor sends you a refund check for returned inventory items
- Record a Deposit of the vendor check:
- Go to the Banking menu, then select Make Deposits.
- If the Payments to Deposit window appears, select OK.
- In the Make Deposits window, select the Received from dropdown and choose the vendor who sent you the refund.
- In the From Account dropdown, select the appropriate Accounts Payable account.
- In the Amount column, enter the actual amount of the Vendor check.
- Enter the remaining information in the Deposit.
- Select Save & Close.
- Record a Bill Credit for the returned items:
- Go to the Vendors menu, then select Enter Bills.
- Select the Credit radio button to account for the return of goods.
- Enter the Vendor name.
- Select the Items Tab.
- Enter the returned items with the same amounts as the refund check.
- Select Save & Close.
- Link the deposit to the Bill Credit:
- Go to the Vendors menu, then select Pay Bills.
- Check the Deposit that matches the Vendor check amount.
- Select Set Credits and apply the Bill Credit you created earlier then select Done.
- Select Pay Selected Bills, then select Done.
Scenario 3: The vendor sends a refund check that is not related to an existing bill
Examples include rebates, reward incentives, refunds, reimbursements, or checks issued by a vendor to cash out an existing credit.
- Record a Deposit of the vendor check:
- Go to the Banking menu, then select Make Deposits.
- If the Payments to Deposit window appears, select OK.
- In the Make Deposits window, select the Received from dropdown and choose the vendor who sent you the refund.
- In the From Account dropdown, select the appropriate Accounts Payable account.
- In the Amount column, enter the actual amount of the Vendor check.
- Enter the remaining information in the Deposit.
- Select Save & Close.
- Record a Bill Credit for the amount of the Vendor Check:
- Go to the Vendors menu, then select Enter Bills.
- Select the Credit radio button to account for the return of goods.
- Enter the Vendor name.
- Select the Expenses tab and enter the Accounts you would normally use for refunds.
Note: If you are not sure which account to select, Intuit recommends contacting your accounting professional. - In the Amount column, enter the appropriate amount for each Account (the amounts may have to be prorated.)
- Select Save & Close.
- Link the Deposit to the Bill Credit:
- Go to the Vendors menu, then select Pay Bills.
- Check the Deposit that matches the Vendor check amount.
- Select Set Credits and apply the Bill Credit you created earlier then select Done.
- Select Pay Selected Bills, then select Done.
Scenario 4: A vendor sends a refund check on behalf of the original vendor
- Create a deposit for the vendor who sent the refund check:
- Go to the Banking menu, then select Make Deposits.
- If the Payments to Deposit window appears, select OK.
- In the Make Deposits window, select the Received from dropdown and choose the vendor who sent you the refund.
- In the From Account dropdown, select the appropriate Accounts Payable account.
- In the Amount column, enter the actual amount of the refund.
- (Optional) Enter a memo, check number, payment method and class.
- Select Save & Close.
- Create a Bill for the Amount of the Deposit and apply it to the Deposit:
- Go to the Vendors menu, then select Enter Bills.
- In the Vendor field, select the vendor who sent the refund.
- In the Amount Due field, enter the amount of the refund.
- Select the Expense tab.
- In the Account field, select a Wash account. (Example would be an expense account).
- In the Amount field, enter the amount of the refund.
- Select Save & Close.
- Go to the Vendors menu, then select Pay Bills.
- Select the Bill and select Set Credit.
- Select the Credit and select Done.
- Select Pay Selected Bills, then select Done.
- Create a Credit for the Original Vendor:
- Go to the Vendors menu, then select Enter Bills.
- Select the Credit radio button.
- In the Vendor field, select the vendor who sent the refund.
- In the Credit Amount field, enter the amount of the refund.
- Select the Expense tab.
- In the Account field, select the account used on the original Bill.
- In the Amount field, enter the amount of the refund.
- Select Save & Close.
- Create a Bill for the Amount of the Credit affecting the Wash Account and apply the Bill to the Credit:
- Go to the Vendors menu, then select Enter Bills.
- In the Vendor field, select the vendor who sent the refund.
- In the Amount field, enter the amount of the refund.
- Select the Expense tab.
- In the Account field, select a Wash account. (Example would be an expense account).
- In the Amount field, enter the amount of the refund.
- Select Save & Close.
- Go to the Vendors menu, then select Pay Bills.
- Select the Bill and select Set Credit.
- Select the Credit and select Done.
- Select Pay Selected Bills, then select Done.
Scenario 5: The vendor sends you the refund as a credit card credit
- Go to the Banking menu, then select Enter Credit Card Charges.
- From the Credit Card dropdown, select the credit card account.
- Select the Refund/Credit radio button.
- Choose the appropriate Vendor name and enter the Date, Ref No, and Amount.
- Enter an appropriate memo to describe the transaction.
- If you returned Items, select the Item tab and enter the Items and Amounts from the refund.
- If the refund does not have Items, select the Expenses tab, select the appropriate Accounts and enter the Amount.
- Select Save & Close.
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