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Level 1

Is it a refund or a expense/payment on invoice? What is best way to record this transaction?

My client made a payment I categorized as 'deposit'. Due to COVID-19, they have chosen to cancel services, therefore I am honoring a refund. How do I track the transactions properly in my books? Or do I just void the invoice?
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QuickBooks Team

Is it a refund or a expense/payment on invoice? What is best way to record this transaction?

A pleasant day to you, @ajayfoto.

 

I'd like to ensure that your records are accurate. To track the refund for your customers' deposit, I suggest processing this using a check or an expense. This way, your books will be recorded correctly. 

 

Let's go ahead and record the refund first. Here's how:

  1. Select + New at the left pane.
  2. Hit on Expense.
  3. Select the customer you want to refund from the Payee ▼ drop-down.
  4. From the Payment account ▼ drop-down, select the bank account where you deposited the payment..
  5. On the first line of the Category column, select an Accounts Receivable.
  6. Enter how much you want to refund in the Amount field.
  7. Fill out the other fields needed, then select Save and close.

Once done, you may now link the refund with the customers' payment to zero out the amount.

 

To do that:

  1. Click on + New.
  2. Select Receive payment.
  3. Choose the same customer you used for the check or expense.
  4. Fill out the other fields as you see fit.
  5. Under the Outstanding Transaction section, select the checkbox for the Expense or Check you created.
  6. Make sure the payment is equal to the open balance, then select Save and close.

To give you more details about this process, please see this link: Record a customer refund in QuickBooks Online.

 

To add up, here are some resources that you can use on your future transactions about refunding a credit card payment and handling customers' credits:

Know that I'll be right here to help if there's anything else you need. Just let me know by leaving a reply below. Take care always, Ajay!

 

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Level 1

Is it a refund or a expense/payment on invoice? What is best way to record this transaction?

Thank you! I did this and I suppose I don’t understand the math. Do I void my invoice afterwards since transaction is cancelled? So it doesn't think I have payments I should be receiving? Is there live help available to see what I am doing? Thank you!

Highlighted
QuickBooks Team

Is it a refund or a expense/payment on invoice? What is best way to record this transaction?

Thanks for getting back to this thread, @ajayfoto. Let me provide you insights regarding your concern. 

 

There's no need for us to void the invoice since you've already created a refund for this transaction. However, you can void it if you didn't create a refund yet as long as you've already maid an internal agreement with your customer.

 

For your second concern, we have available agents online. You can reach out to them if you need any further live assistance. Here's how:

 

  1. Select Help (?) at the top right.
  2. Click the Contact Us button.
  3. Enter your concern in the description.
  4. Hit Let's talk.
  5. Select Get a callback.

 

To ensure we address your concern on time, check out our support hours.

 

Don't hesitate to tag my name in the comment section below if you have other concerns or questions. The QuickBooks Community Team is always ready to provide you a 24/7 assistance.

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