How to enter credit to an expense?

Hi there, @tvdwense.

Let me share with you the steps on how to enter credit to an expense in QuickBooks Online (QBO), here's how:

First, let's create a vendor credit and make sure that it links to the expense account for the specific vendor, here's how:

1. Go to the +New tab and choose Vendor credit.
2. In the Vendor dropdown, select your vendor.
3. Depending on how you record purchases with this vendor, enter the Category details or Item details. Usually, this is the category, product, or service you’re getting credit for.
4. Hit Save and close.

Next, deposit the money you got from the refund:

1. Click the +New button.
2. Select Bank Deposit.
3. In the Account drop-down menu, select the account where you got the refund.
4. From the Add funds to this deposit section, fill out the necessary information.
5. Tap Save and close when done.

For more details, please check this article: Manage vendor credits. 

Also, to have a summary of all the money you paid to a vendor for the year, you can run a Transaction List by Date report. To do so, please check out this link: Run a report with vendor totals. 

Please know that you can always post here if you have other QuickBooks concerns. I'd be happy to help you. Take care always.

There is now a -$100.00 in Accounts payable, but I wanted to credit the vendor Preservation Alliance

Good morning, @tvdwencse. 

Thanks for following up with us. 

I recommend reaching out to your accountant; this way, they can analyze your account and review the vendor credit you've created. Your accountant would know the best course of action for you and your business. If you don't have an accountant, don't sweat it. You can find one here in our Resource Center. 

I'm also including a link to our tutorial page that you may find handy. This includes short video tutorials of all sections of QuickBooks. 

• Video tutorials for QuickBooks Online

Please let me know if you have questions or concerns. I'll be here every step of the way. You can reach out to the Community any time. Take care! 

I have a job I issued a deposit to my vendor for.  I cancelled the job with him.  He applied two bills to the refund check prior to sending to me.  I'm not really certain how to handle this in Quickbooks Enterprise.  I'd appreciate yoru help

Thanks for chiming in on this thread, @amberish1995. I've got the set of steps to handle these entries in QuickBooks Desktop (QBDT).

Let's first record the deposit of the vendor check:

1. Go to the Banking menu, then select Make Deposits.
2. If the Payments to Deposit window appears, tap OK.
3. In the Make Deposits window, click the Received from drop-down and choose the vendor who sent you the refund.
4. In the From Account drop-down, select the Accounts Payable account.
5. In the Amount column, enter the actual amount of the Vendor check. Then, hit Save & Close.
   
   

Once done, let's record a Bill Credit for the refunded amount:

1. From the Vendors menu, select Enter Bills.
2. Choose the Credit radio button and pick the Vendor name.
3. From the Expenses tab, enter the Accounts on the original bill.
4. In the Amount column, enter the appropriate amount for each Account.
5. Hit Save and Close.
   
   

Finally, let's link the deposit to the bill credit using the pay bills option. Here's how:

1. 1. From the Vendors menu, click Pay Bills.
   2. Check the Deposit that matches the Vendor check amount.
   3. Tap Set Credits and apply the Bill Credit you created earlier then select Done.
   4. Select Pay Selected Bills, then select Done.
      
      

Furthermore, different scenarios require a specific set of steps to account for a vendor refund. I'd recommend checking out this article for other ways to record them in QuickBooks: Record a vendor refund in QuickBooks Desktop.

Let me know if you have any other concerns with recording vendor transactions in QBDT. I'm always ready to help. Have a great day ahead!

Kevin, thank you but this didn't work.  

Here is the layout of what happened.  If I use your directions I enter the check amount at $6356.35, applied the credits of $1450.00 and in the Pay Bills window I have a balance of $4906.35 which is the balance of the check the vendor wrote me.

We received a job to build a gate.  The gate cost     $12,712.70

I issued a deposit to the iron guy for                          $  6,356.35

The client canceled the job because of permitting

    issues.  The fabricator invoiced me for a site visit

    and painting the posts the gate for                        ($1,450.00)

The fabricator applied the total to his refund check

    to me in the amount of                                            $ 4,905.35

The deposit check of $6356.35 has cleared our bank in May 2023.  I can change the bill amount original made for the deposit to $6356.00 but how do I handle the credit of $1450.00 against the $6356.35 and process the refund in QB.  How am I to handle this mess in QB?

Hi there, amberish1995.

Thanks for getting back to us and providing additional details. I'm here to help you record your vendor refund in QuickBooks Desktop (QBDT).

Based on the information you've provided, you will have to modify the check you've made and change the posting account to the Other Current Asset (OCA) account instead. Here are the steps:

1. Open the check, then go to the Expenses tab.
2. In the Account column, select the OCA account.
3. Click Save & Close.

Following that, modify the bill and navigate to the Expenses tab. Next, include the OCA account and the amount. Here's how:

1. Open the bill, then go to the Expenses tab.
2. Select the OCA account.
3. Enter the amount (1,450.00) as a negative value.
4. On the Items tab, enter the items. The bill will equal the balance owed after deducting the prepayment. Note that recording the bill will reduce the asset account.
5. Hit Save
6. Then, manually mark the bill as paid by clicking the Pay Bills.

Once done, deposit the refund posting to OCA account. Here's how:

1. Go to the Banking menu, then select Make Deposits.
2. If the Payments to Deposit window appears, select OK.
3. In the Make Deposits window, select the Received from drop-down and choose the vendor who sent you the refund.
4. In the From Account drop-down, select the OCA account.
5. In the Amount column, enter 4,905.35.
6. Hit Save & Close.

For more information about managing vendor refunds and vendor prepayments, check out these articles for future reference:

• Record a vendor refund in QuickBooks Desktop.
• Record vendor prepayments or deposits for prepaid parts or services.

Please leave a comment below if you have follow-up questions about vendor refunds or anything else, amberish1995. I'll be here to assist. Take care.