How to record vendor refund

I'm trying to do the same thing - record a refund check from an insurance company, but the instructions aren't working for me. I added a Vendor Credit and I added the check as a Bank Deposit. Then when I try to enter in an Expenditure or a Check for the Vendor, only the Vendor Credit shows up in the Add to Expense window; the Deposit isn't there. When I try to add the Vendor Credit, I see a popup telling me that I cannot add a credit for a vendor without any open bills. How do I link the Credit and the Deposit?

Quickbooks Desktop

When I do this there is still a negative balance towards the Vendor. I don't understand how adding a credit then paying the "bill" balances the account. The bill pmt- check shows a $0.00 debit twice and does not solve the issue.

Received a bill for a Vendor for a service we later decided we did not want to use but we had already paid the bill via check. So the Vendors balance was $0.00 because it all washed out but when adding the check we received back from the vendor and creating a deposit it now credits a balance. 

What am I doing wrong??

We'll have to link them via Pay Bills, LisaG7.

This way, we'll be able to zero out the negative balance. This is the last process to keep your vendor expenses accurate:

1. Click the + New button.
2. Select Pay Bills.
3. Select the bank deposit you just created. You’ll see the amount of the vendor credit in the Credit Applied field and the Total payment should be $0.00.
4. Click Save and close when you're done.

We can customize the Transaction List by Date report to show all the payments created by the vendor.

Let me know if you have other questions.

I can show you the easy steps in recording vendor refund in QuickBooks Desktop, LeadingForce.

The steps provided by a colleague is for QuickBooks Online users. Creating a vendor refund in QuickBooks Desktop depends on how you received it from your vendor. For returned items, you'll just have to create a bank deposit and then a bill credit which you'll link both using the Pay bills option.

Record a deposit

1. Click Banking and select Make Deposits. 
2. Select OK if prompted with the Payment to Deposit window.
3. In the Make Deposits window, select the vendor in Received from, Accounts Payable under From Account, and then enter the actual amount of the vendor check.
4. Select Save & Close.

Create a Bill Credit for the returned items

1. Go to the Vendors menu and select Enter Bills. 
2. Click the Credit radio button.
3. Enter the vendor's name and go to the Items tab to enter the returned items with the same amount as the refund check.
4. Click Save & Close.

Link both deposit and credit

1. Click Vendors and select Pay Bills.
2. Select the Deposit that matches the vendor check amount and select Set Credits.
3. Apply the Bill Credit you just created and then Done.
4. Click Pay Selected Bills and then Done.

There may be other ways you'll receive vendor refunds in the future, you can follow the steps on the specific scenario on this page: Record a vendor refund in QuickBooks Desktop. To help you manage vendor transactions, you can run reports on QuickBooks Desktop.

Keep me posted if there's anything else that you need help with. Take care!

Hello there, mlowery.

I know how important for your business to be able to track the vendor refund. Let me guide you in the right direction on how to record the entry.

The process to input the refund depends on how you record your purchases. Since you’re using the Simple Start version, create a credit card credit to input the refund given by your business credit card.  

Then, connect the account of the downloaded transaction to the expense account used in the original purchase. Doing so ensures you can match them in the For Review tab.

1. Go to the New button to select Credit card credit under Vendors.
2. Click the Payee drop-down and enter the correct name in the field box.
3. In the Bank/Credit account field, pick the credit card account you received the refund.
4. Select the date in the Payment date section.
5. In the Category details section, choose the same expense account of your original purchase.
6. Then, enter the amount.
7. Click Save and close.

Next, update the downloaded credit adjustment from Uncategorized Asset to the expense account. Here’s how:

1. Tap the Banking menu and choose the business credit card account.
2. In the For Review tab, find and select the credit adjustment.
3. Pick the expense account in the Category field.
4. Click the Find match option and locate the credit card credit transaction.
5. Then, click the box before the date and Save.

To help manage your downloaded transactions, see the following links. These resources provide an overview of classifying bank data and adding rules to online banking entries.

• Categorize and match online bank transactions in QuickBooks Online
• Setup bank rules to categorize online banking transactions in QuickBooks Online

Reach out to me again if you have any clarifications or other questions. I’ll get back and answer them for you.