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How to give a refund when an item that was shipped has been lost by carrier

If I sell an inventory item or an inventory assembly to a customer and then the customer never receives the item because the carrier loses it, how do I give a refund to the customer without increasing the inventory amount for the item that was sold to them?

 

On the invoice, if I click "refund/credit" then the inventory item I am giving the refund on will be added back in to inventory.  However we do not have the item so that would be incorrect. 

 

We will attempt to file a claim with the carrier, however we have found it is extremely rare for a carrier to pay even if it is clear they are at fault.   But there would be two options I need to understannd:

 

1) refund the customer without putting the item back in inventory and the carrier does not pay for the lost item

2) refund the customer without putting the item back in inventory and the carrier does pay for the item.  

 

The only way I can think to handle this is to refund the customer (which will put the item back in inventory), then do an inventory adjustment of -1 with the account being a loss/theft expense account.  

 

Thank you.  

 

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Best answer 4 weeks ago

Best Answers
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QuickBooks Team

How to give a refund when an item that was shipped has been lost by carrier

You're on the right track in processing a refund, @elsalty.

 

You can perform an inventory adjustment to lower the quantity of your inventory items. I can guide you in doing so.

  1. Go to the Lists menu.
  2. Select the Item List.
  3. On the Activities tab, click the drop-down arrow.
  4. Choose Adjust Quantity/Value on Hand
  5. Pic the Adjustment Account by clicking the drop-down arrow. 
  6. Select the item used and record the New Quantity and Qty Difference.
  7. Click Save & Close

I'd recommend consulting with an accountant in choosing an Expense Account as the Adjustment Account. By doing so the transaction will reflect on your profit and loss report. You can read through this article for more details about the process: Adjust your inventory quantity or value in QuickBooks Desktop.

 

On the other hand, you can use this article as a reference if you have specific invoices that become uncollectible: Write off bad debt in QuickBooks Desktop.

 

Feel free to visit us here if you have other questions about tracking your income and expenses in QuickBooks. I'm always here to help.

View solution in original post

1 Comment
Highlighted
QuickBooks Team

How to give a refund when an item that was shipped has been lost by carrier

You're on the right track in processing a refund, @elsalty.

 

You can perform an inventory adjustment to lower the quantity of your inventory items. I can guide you in doing so.

  1. Go to the Lists menu.
  2. Select the Item List.
  3. On the Activities tab, click the drop-down arrow.
  4. Choose Adjust Quantity/Value on Hand
  5. Pic the Adjustment Account by clicking the drop-down arrow. 
  6. Select the item used and record the New Quantity and Qty Difference.
  7. Click Save & Close

I'd recommend consulting with an accountant in choosing an Expense Account as the Adjustment Account. By doing so the transaction will reflect on your profit and loss report. You can read through this article for more details about the process: Adjust your inventory quantity or value in QuickBooks Desktop.

 

On the other hand, you can use this article as a reference if you have specific invoices that become uncollectible: Write off bad debt in QuickBooks Desktop.

 

Feel free to visit us here if you have other questions about tracking your income and expenses in QuickBooks. I'm always here to help.

View solution in original post

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