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Senior Explorer *

How to enter Vendor refund to credit card on outstanding credit memo

We entered a bill for a vendor invoice that was prepaid with a credit card.  We then were issued a credit from the supplier for overcharged freight and we entered that as a credit memo. The supplier then refunded the amount of the credit to our credit card. 

How do we we handle this in QB? There's an outstanding credit memo on the vendor account and we need to somehow apply the refund to the credit card and the credit memo. When we pull up the Vendor Information screen it shows in the "type' column that the credit was a "bill refund" applied to A/P.
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Best answer 12-10-2018

Accepted Solutions
Established Community Backer ***

Use enter credit card charges/credit instead of enter bil...

Use enter credit card charges/credit instead of enter bills/credit. 

Enter Credit Card Charge Refund/Credit: Go to Banking > Enter Credit Card Charges. Select the Refund/Credit radio button and enter the receipt that you have for the refund. This transaction should be a mirror-image of the original purchase, meaning that you select the same expense / asset accounts and have the same tax codes and amounts.
26 Comments
Established Community Backer ***

Use enter credit card charges/credit instead of enter bil...

Use enter credit card charges/credit instead of enter bills/credit. 

Enter Credit Card Charge Refund/Credit: Go to Banking > Enter Credit Card Charges. Select the Refund/Credit radio button and enter the receipt that you have for the refund. This transaction should be a mirror-image of the original purchase, meaning that you select the same expense / asset accounts and have the same tax codes and amounts.
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TY!! :)

TY!! :)
Highlighted
Senior Explorer *

I should have clarified this was a partial refund not a f...

I should have clarified this was a partial refund not a full refund. Will it still work this way and will it "clear" the credit memo?
Established Community Backer ***

You'll have to use A/P as the expense account if you have...

You'll have to use A/P as the expense account if you have also entered a vendor bill/credit. Now from pay bills you select the bill/credit and the refund then ok.
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Great!!! Yes you must use Accounts Payable as the Account...

Great!!! Yes you must use Accounts Payable as the Account and you must put the vendors name in the Customer.
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This helped, thank you.

This helped, thank you.
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Ditto! Thanks!

Ditto! Thanks!
Super Contributor *

Does this apply to Quickbooks Online?

Does this apply to Quickbooks Online?
Established Community Backer ***

@ Mac Since you have the credit in a/p use enter CC char...

@ Mac
Since you have the credit in a/p

use enter CC charges, top left set to a credit
on the expense tab select accounts payable and on that same line in the name column select the vendor name

bring up pay bills, there will be a "bill" as a result of the CC entry, select it click apply credits, pay the "bill"
Senior Explorer *

Thanks. We did this as you describe and now there are two...

Thanks. We did this as you describe and now there are two transactions in the pay bills window.  There is one for $30 and one for $-30. Is this the way it should be? If so is the correct thing to do now select them both and click "ok" to cancel each other out or??
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I have been searching for this answer and your solution w...

I have been searching for this answer and your solution worked perfectly!!!!! Thank you!!!
Established Community Backer ***

You're Welcome

You're Welcome
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Thanks Rustler, I was searching for  a solution to solvin...

Thanks Rustler, I was searching for  a solution to solving the same problem. It is a perfectly simple fix. Cheers
Established Community Backer ***

You're Welcome

You're Welcome
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In addition, you can simply create the credit in the vend...

In addition, you can simply create the credit in the vendor section of QB and then on the "Expenses" tab (if you are tracking inventory. If not then stay on that tab and go to the next line) in the "Account" drop down, select the CC account that the credit was issued to and reverse the amount of the credit (negative amount).  The credit total will show as a "zero" total, but the CC register will show a deposit that you can use to match up with your CC statement.

Not applicable

Re: Does this apply to Quickbooks Online?

I have the same question. I cannot create a negative expense online and do not have a vendor credit; just a refund to my CC.

QuickBooks Team

Re: Does this apply to Quickbooks Online?

Thank you for adding a reply and joining the thread, @Mariasherbert.

 

I'm here to help you record the transactions correctly in QuickBooks Online (QBO).

 

The steps above works for QuickBooks Desktop (QBDT), in QuickBooks Online (QBO) we can create a credit card credit. Let me show you how.

 

  1. Go to the Plus (+) icon.
  2. Select Credit Card Credit.
  3. Select a payee and select a credit card account beside Credit Card Account.
  4. Fill in the necessary information and enter the amount.
  5. Click Save and close.

You can also reach to your accountant to ensure that this will be the best process for you. Stay in touch if you have any other questions. Have a good day ahead!

Not applicable

Re: Does this apply to Quickbooks Online?

Thank you!! 

QuickBooks Team

Re: Does this apply to Quickbooks Online?

You're always welcome, @Mariasherbert.

 

Please know that our doors are always open here in the Community page. Feel free to drop a post if you have any other concerns in the future. Wishing you continued success!

Community Contributor *

Re: Does this apply to Quickbooks Online?

Hello,

I am using QuickBooks Online and I have entered the vendor refund to my credit card as a credit card credit as you describe. However I can not find a way to then apply this to the vendor credit that I had created previously. E.g. I returned items worth $50 to vendor and created a credit memo in the system (vendor credit) for $50. However the following month the vendor refunded the $50 to my credit card. I enter the credit card credit for $50. However there is no way to match this against the vendor credit that is still open. When I try to use the "pay bills" approach that is described for matching vendor refunds via check against a credit memo it does not work because the credit card credit is not available to be selected.

 

QuickBooks Team

Re: Does this apply to Quickbooks Online?

Hello there, @inishowen.

 

Thanks for trusting us in answering your concern. I can help you link the Vendor Credit and Credit Card Credit made in QuickBooks to record your vendor refund.

 

You'll need to create a dummy Bill and Make Payment to link these two transactions.

 

Here's how:

  1. Go to the Plus icon.
  2. Under Vendors, select Bill.
  3. Enter a zero amount of bill.
  4. Click Save.
  5. Open the saved Bill.
  6. Click the Make payment button. You'll now be able to link the Credit Card Credit and Vendor Credit.
  7. Then, click Save and close.

Please see my screenshots to visualize the steps.

 

You should be able to link the two transactions from your vendor. Let me know how things go once you've tried the steps. If there's anything else you need from me, feel free to comment below. I'm always here to help in any way I can. Have a great rest of your day!

Community Contributor *

Re: Does this apply to Quickbooks Online?

Hello and thank you for your suggestion.

 

However it does not seem to work for me. I am using Quickbooks online and when I do bill payment I have the vendor credit available to select but not the credit card credit.

 

Also, as I think about it some more I think that perhaps it would not be appropriate from an accounting perspective to apply a credit card credit against a vendor credit as this would in effect be crediting the same account twice - correct?

 

So let me restate the problem and suggest what I think I need to do and then I would love to hear from others how you handle it.

Let's say I purchase $200 worth of inventory from a vendor, and pay using my credit card

I then decide to return $40 worth of goods and create a credit memo for $40.

However the vendor issues a credit card refund for the $40.

So now I need to process the refund from the vendor as a credit card credit.

What do I do with the credit memo?

Do I just delete the credit memo once I receive the refund?

If the credit memo was created in a prior period should I enter a bill to offset the credit memo?

I would love your input. This is a scenario that occurs not infrequently for my client. Thank you

Community Contributor *

Re: Does this apply to Quickbooks Online?

Actually, when I coded the credit card credit to Accounts Payable it did show up to select when paying the bill. I had coded it incorrectly before. Thank you very much

QuickBooks Team

Re: Does this apply to Quickbooks Online?

Great to hear that you've used the right account on your credit, inishowen.

 

If you need anything else, feel free to join us back here. Thanks!

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