Purchased product (expense) and resold to customer (invoice with markup). Customer paid and we paid vendor. Customer requested refund which vendor sent us. How to record?

I'm delighted to walk you through the steps for entering the customer refund and the refund you received from your vendor in QuickBooks Online (QBO), system.

To handle these accordingly in QBO, we'll have to record a refund receipt for the customer refund. Then, enter a bank deposit to your account where you've taken the expense from to enter the return sent by your vendor.

Let's start with generating a refund receipt. Please follow the steps below to proceed:

1. Click the + New menu and click Refund receipt.
2. Choose the customer you need to refund from the Customer dropdown. Then, modify the Refund Receipt Date.
3. Pick the Payment method and select the bank account where the payment was deposited on the Refund From dropdown.
4. Provide accurate information on the Service Date, Product/Service, Amount columns, and the rest of the form.
5. Double-check everything, and once done, hit Save and close.

Next, let's make the bank deposit for the returned expense amount from your vendor:

1. Go back to the + New menu and click Bank deposit.
2. Scroll down to Add funds to this deposit section.
3. Pick the bank account you've chosen as your Payment account for your expense transaction from the Account dropdown.
4. Select your vendor in the Received From column. Then, pick the Category or the Product/Service Account you've chosen to generate the expense data.
5. Fill out the rest of the form accurately.
6. Once done, hit Save and close.

Finally, I'm adding an article about how you can maximize your report to check and manage the money moving in and out of your company and bank account: Use reports to track cash flow in QuickBooks Online.

I'm always happy to provide the needed assistance. Whenever you require additional help recording the expense return or customer refund in QBO, kindly add a comment below. I'm one click away.

Thank you for this explanation. I do have one other question. In addition to the refund, we also need to charge the customer for services. My hope was to create one check that had the refund amount, and then deduct from that the services charge. So let's say the refund is for $1,000 and the charge is for $500. I'd like the check to be for the difference, $500, rather than cutting a refund check, and then sending a separate invoice and waiting for payment on that. Can i add a line item to the refund receipt check to deduct the services charge? 

On behalf of my colleague, you're most welcome systems. Thank you for getting back to us. Let me assist you further to ensure you can charge your customer for the service you've provided.

You'll need to create a new service item for the charges with a negative amount to allow the system to recognize it as a deduction. Then, add it as a line item.

Let me show you how:

1. Go to the Product & services and choose the New green button.
   
   
2. Select Service and enter the name. (ex. Processing Fees)
   
   
3. From the Sales price/rate, key in the rate with a negative sign.
4. Once done, click Save and close.
   
   

Afterward, add it to your refund receipt. I'll attach an image for visual reference.

You can always count me in if you have additional questions or require further clarification about providing customer refunds, systems. We're always available to help you throughout this process to ensure you can manage your sales activities effectively. Take care, and have a great day!