Bill created and paid then vendor sent back payment as the policy was complete and didnt need another payment

Keeping track of these refunds is essential for maintaining accurate records and managing your cash flow efficiently, Grimayoj. It's good to have back in the QuickBooks Community Space. I’m here to assist you in tracking your returned vendor payments, ensuring you have a clear and organized view of your financial transactions. 

Since the money was deposited back into your account, you should first create a bank deposit in the program to accurately clear your payables. When recording the deposit, be sure to choose to the accounts payable account as these represents the payment to the vendor who you originally paid for. By choosing the accounts payable account, the program will automatically clear the previous accounts payable balance and update it with the new balance. 

Here's how: 

1. Navigate to the +New and choose Bank Deposit. 
2. Select the Account you used when you made the vendor payment. 
3. On the Received from select the vendor. 
4. Choose the Accounts Payable account.
5. Key in the necessary details. 
6. Once everything is in place, click Save and close. 
   

Then, you'll need to create a vendor credit with the same account you used to record the bill for the insurance expense. By creating a vendor credit, you're essentially recording a decrease in the amount owed to the vendor, which will affect your accounts payable balance. After that, you can link them through the Pay bills transaction. This helps to ensure your financial records accurately reflect the transactions that took place between you and your vendor. 

Following these processes will ensure that the returned payment is properly recorded back into your account to ensuring accurately financial activities in the program.  

By implementing a structured approach, you can easily monitor these transactions, which not only helps with reconciliation but also enhances your overall understanding of your vendor relationships, Grimayoj. If you have any questions or specific scenarios you'd like to discuss, feel free to share them in the comments section below. I’ll be here to help.

Whats the account for the vendor credit and how do I link the vendor credit if I need to.

THanks

And what account for the Bank Deposit? Assuming Accounts Payable? And vendor credit whatever account was used for the bill?

Thanks

Good morning, @Grimayoj. 

Thanks for coming back and asking additional questions. 

Yes, you'll need to use the accounts payable account for the deposit part. If you're not sure about what the other accounts should be listed as on certain forms, I recommend consulting with your accountant. They'll be able to give you the best advice. 

For more information about entering vendor credits, review this guide below: 

Enter Vendor Credits and Refunds

Feel free to reach back out if you have any other questions. I'm only a comment away. Take care! 

Do I link the vendor credit? 

Yes, you'll need to link the vendor credit to ensure your accounts are accurate in QuickBooks Online (QBO), Grimayoj.

First, let's create a vendor credit to link the bank deposit. I'll show you how:

1. Click the + New button.
2. Select Vendor credit.
3. In the Vendor dropdown, choose your vendor.
4. Enter the Category or Item details, depending on how you record purchases with this vendor. U
5. Hit Save and close.

Then, deposit the money that has been returned. Follow the steps below:

1. Click the + New button.
2. Select Bank deposit.
3. In the dropdown menu, choose the account from which you received the refund.
4. In the Add funds to this deposit section, fill out the following fields:
   • Received from: Select the vendor who gave you a refund.
   • Account: Select Accounts Payable.
   • Payment method: Enter the method your vendor used to refund you.
   • Amount: Enter the amount of your refund.
5. Hit Save and close.

After recording both transactions, you can link them through the Pay Bills feature, ensuring that your accounts payable reflect any credits appropriately.

Here's how:

1. Click the + New button.
2. Select Pay bills.
3. Choose the bank deposit you recently made. The Credit Applied field will display the vendor credit amount. 
4. Hit Save and Close.

Check out this article for the detailed steps if you need to review all your vendor transactions in QBO: View vendor transactions.

Feel free to click the Reply button below if you need help recording a returned payment in QuickBooks Online. I'm always here to help. Have a great day.

Remember I already have a BILL and a BILL PAYMENT ENTERED prior to the deposit as I didnt think that the vendor was going to send the money back... so I currently have a BILL and a BILL PAYMENT and a DEPOSIT.. So this reconciles to my bank records... Now I need a vendor credit to offset what was paid to them from a accoutning perspective... So i did the vendor credit and saved it.. Then went to pay bills as you stated but again I already did the bill payment of the orriginal bill.. Now when I do the bill payment I see the three lines:

BILL for X amount

Deposit for X amount

VENDOR credit for X amount..

Can you print screen what Im supposed to do now?

THanks

Thanks for getting back to us, Grimayoj. I'm here to provide additional information about tracking your returned payments in QuickBooks Online (QBO).

After you create a bank using Accounts Payable (AP), it will appear as a deposit entry in the Pay Bills window. You will then apply this deposit to offset the vendor credit you created.

If you notice three transactions listed in the Pay Bills window, it may be because you have another outstanding bill in addition to the original bill and the vendor credit.

I've added a screenshot for your reference.

I’ve included this article for detailed guidance on managing your bills in QBO: Enter and manage bills and bill payments in QuickBooks Online.

Consider me your ongoing support if you need further help to manage your returned payments in QBO. Assistance is just a post away. 

No screen shot that I can see. But did you look at my screen shot I sent.. It is clear the bill is paid for by the bill payment as I explained before... So please look at the screen shot. Thats a "SAVED" bill Payment..

Thanks

I understand that managing returned payments from a vendor is crucial in managing your expenses for maintaining accurate financial records in QuickBooks Online (QBO), Grimayoj. Allow me to jump into this conversation to offer more details and guidance on managing bill payments.

Based on the screenshot you've provided; I can see that there are three transactions displayed. It appears that this window was accessed through the bill payment link, which explains the presence of these transactions. The presence of this bill is because this bill is connected to the corresponding bill payment.

Please see the attached photo for clarification:

To link Deposit and vendor credit transactions, simply select the boxes next to each transaction and click on Save and close. Refer to the image below for clear guidance:

Moreover, I’ve added this article for comprehensive information about managing your bills in QBO: Enter and manage bills and bill payments in QuickBooks Online.

Thank you for reaching out and expressing your concerns with us, @Grimayoj. As you manage your bills, please know that the Community is always here if you have questions or any concerns you might have. Just hit the Reply button and we’ll circle back to you.

Thanks Gen Marie... Only one more question... I want to make sure all accounts selected are correct for what I was doing... 

Bill - Insurance Expense

Bill payment - Insurance expense 

Vendor Credit - Insurance Expense

Deposit - Accounts payable 

I believe this is correct that the deposit should be A/P..