How to refund a customer

Great question, @PackoutCampers 

I know the instructions provided on the QBO Help feature have been outdated for at least three years. Let's see if any QBO employees here can give you a current answer that works.

Hello there, PackoutCampers.

To process a refund in QuickBooks Online (QBO), it's important to note that there are various scenarios and specific processes that may apply. I'd gladly walk you through the detailed steps to accurately record refunds and keep your financial records up-to-date.

To refund a customer in QBO, here are the following steps:

Enter a Credit Memo:

1. Select + New and click on Credit memo.
2. In the Customer field, choose the appropriate customer.
3. Enter the Credit Memo Date, Amount, Tax, and Product/Service (This is the category, product, or service you’re getting a credit for).
4. Please note that if you choose an inventory item, QuickBooks will put it back into inventory. If the item is defective and don't want it added back to inventory, you can make an inventory adjustment.
5. Select Save and Close.

Issue the Refund:

1. Select + New and choose Expense.
2. Enter the desired customer in the Payee field
3. In the Payment Account field, choose the bank where the money is refunded.
4. In the Category field, select the Debtors account (Accounts receivable).
5. In the Amount field, enter the amount of the refund.
6. Choose the appropriate Tax (not inclusive/exclusive of tax) in the Tax field, and press Save.
7. Next, go to + New and choose Receive payment.
8. Add the Customer and select the Payment method, and Deposit to.
9. The balance should be 0 as they will cancel each other out.
10. Select Save and Close.

Moreover, if you utilize Online Banking, start by navigating to the Transactions section, then look for Bank Transactions. Once you find the record you are looking for, make sure to match it accurately.

For more detailed information on the various refund process scenarios, I recommend reading this article: Record a customer refund in QuickBooks Online.

In addition, you may also find this article helpful for information on how to categorize transactions uploaded to QBO: Categorize online bank transactions in QuickBooks Online.

Please tag my name in your reply if you have other questions about recording income-related concerns in QBO. I'm more than willing to assist you further. Have a pleasant day!