I am having a similar issue.  We wrote a check to a vendor for $5550.00.  It was a rental. We ended up not using so they gave a check back for $4750.00.  I deposited the check, made a credit for the vendor.  They now show a negative $4750.00 in their account when I go to your step 3: vendor pay bills apply the deposit...the vendor and the credit does not show up on my list?  What am I missing?

Thanks!

Beth G.  This is where I get stuck...the Vendor with the credit amount does not show up in my list of vendor's to pay bills... even though they have the credit...

Welcome to the Community, @bethbeth66.

I can provide some clarifications about recording a refund in QuickBooks Online.

When you encounter this type of scenario, you can start entering a vendor credit and hit the expense account you use for the vendor. Once done, you can then proceed with making a deposit and making sure you select the Accounts Payable account.

By doing this process, we'll be able to show the bank deposit when paying the bills. For detailed instructions, I suggest you visit this article: Enter a refund from a vendor.

Additionally, here's a helpful reference that you can check out about entering credits: Enter a credit from a vendor.

I'm only a few clicks away if you have any other questions. Wishing you and your business continued success.

Hi there,Thank you.  I've tried this several times and it is not working.  I go to the vendor record, create a credit for the amount, post it to the same accounts and customer I did when we first received/paid the bill. This results in a credit showing on the vendor account.  I manually create a bank deposit, put in the vendor, exact account and amount and hit enter.  This just adds the refund to my bank account.When I click on pay bills, the vendor does not show up in the list.  (I'm thinking because we don't owe them anything? and they have a credit on their record?This is where I am stuck.  I can't link the deposit to the credit and wipe out the credit on the vendor record.  Also interesting to note, the vendor credit, the deposit nothing shows up in the P&L record for the customer (which everything is posted to.)  I'm using qb for desktop the links aren't helpful as once I get to pay bills - nothing shows up as being owed for the vendor... just bills that I owe for other vendors..Does that make sense?Thanks so much for your help!Beth G.

Hello @bethbeth66,

You'll have to select your Accounts Payable account under the FROM ACCOUNT column when making a bank deposit. This way, it'll be linked to the credit you created (initially the refund you received). You can take a look at the screenshots below for your visual reference.

From here, you can open the Bill Pay window and select the credit to close your transaction.

1. Go to Vendors.
2. Select Pay Bills.
3. Under SELECT BILLS TO BE PAID, select the same vendor.
4. Click Set Credits.
5. Select the credit you recently created.
6. Click Done.
7. Select Pay Select Bill.

Lastly, here's a few articles you can read for ideas about how you can manage your vendors and expenses: Income and Expenses for QuickBooks Desktop.

If you have any other questions, just leave them in the comments. I'll be happy to lend a helping hand.

That worked!!! I wasn't using the accounts payable account on the deposit!

Thanks so much!

Beth G.

Thank you for this! I kept selecting a COGS account thinking it was under AP, but I was wrong. Switched it to AP account and worked like magic. Thank you again. 

This is beyond ridiculous. Why I can't just record Refund as negative balance out of the same account the payment was made from in a single step.

Hi there, Davefreel.

If the refund came from an inventory item, then the process in recording the vendor refund for QuickBooks Online works that way. 

Though, you can use a bank deposit to record the amount.

1. Go to + New.
2. Choose Bank Deposits.
3. In the Deposit To drop-down, select the account where the money will be deposited.
4. Type in the Date.
5. Enter these fields:
   • Received From: Choose the vendor who sent you a refund.
   • From Account: Select the Accounts Payable account or the account used in the expense transaction.
   • Amount: Enter the vendor check amount.
6. Click Save and Close.

You can also visit the Enter a refund from a vendor article for additional insights about the process.

In case you've got other QuickBooks concerns, you can visit our Help articles page.

I'm just a few clicks away if you have additional QuickBooks questions.

Hi,

it shows 2 negative amounts on the vendor transaction list when I followed your instructions. help.

You've come to the right place, @sbae.

Have you recorded a vendor credit to your vendor? If so, you'll want to apply the vendor credit to your deposit via pay bills. Let me guide you how.

1. Go to +New, then Pay bills.
2. Select the bank deposit you just created. Scroll down to see the amount of the vendor credit in the Credit Applied field. The Total payment should be $0.00.
3. Click Save and close.

With these steps, you'll be able to keep your vendor expenses accurate. You can check this article to learn more about recording vendor refund at this link: Enter a refund from a vendor.

We also have a guide on applying vendor credits that I'm sure you'll find helpful. It has detailed steps to help you through the process.

That'll do it. Please know that we're here if you have other questions or concerns. Don' hesitate to reply anytime. Thanks for reaching out to us today, and I wish you have a great week ahead.

I did that, but as you can see on the attachment there're 2 negative numbers on from credit memo, one from the check deposit, and zero from the Bill Payment step. 

Hello again, @sbae.

I appreciate your prompt response and providing a screenshot.

It appears that the two amounts with the negative value you're referring to are different based on the transaction date. 

To isolate the issue, I recommend opening the transaction by clicking the View link to check if you'd need to delete it or not. 

Additionally, I want you to get the most out of QuickBooks for your business. You can check some articles that are designed to help you get acclimated to the software. They can be accessed at the following link: QuickBooks Tutorials.

Please let me know how it goes. I'll be looking forward to hearing back from you. Have a great day!

Hi! How can I record a bank refund in Quickbooks Simple Start? Thanks

Hi there, @brenda0608.

In the Simple Start version, you can create a deposit to record your bank refund. The vendor credit feature is only available in the higher versions of QuickBooks Online (QBO). Here's how to create a bank deposit:

1. From the left menu, click the + New icon and select Bank deposit.
2. Enter the necessary information.
3. On the Add funds to this deposit section, select the vendor or customer.
4. Enter the Account column. (In this section, select the expense account used upon purchasing the equipment).
5. Enter the amount.
6. Verify the details, then click Save and close.

I added a screenshot for additional reference.

I recommend running the Deposit Detail report to see the list of your deposit transactions. You can also customize it to identify the information you want to highlight from there. Then, memorize it to save the changes you made. For more information, check out this article: Memorize reports in QuickBooks Online.

Please don't hesitate to comment below if you need anything else. I'll be here to help you. Stay safe out there.

Thank you for your reply. Is this applicable for Simple Start Subscription?

Hello, brenda0608.

The steps provided by my peer above is currently unavailable in QuickBooks Online Simple Start. I will have my colleague update her answer.

You can go through this link to know more about the features and options available in QuickBooks Online versions: QuickBooks Comparison Chart.

You can always get back to me if you have any other QuickBooks concerns. Have a nice day.

I don't think you're understanding me correctly.

one number is from the creditmemo, since it's from last year it has December date on.

And recording the deposit in a accounts payable to match the deposit with the credit memo lists another negative number on the vendor list as well. 

Does that makes sense? What needs to be done?

Hi there, sbae.

I'll help you in handling these transactions.

Since you already created the vendor credit and deposited the money you got from the refund, we'll have to link them via Pay Bills. 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.

In case you'll need to track all the money you've paid to a vendor for a particular period, we can customize the Transaction List by Date report to show all the payments.

If there's anything else that I can help you with, please don't hesitate to insert a comment below. Stay safe and healthy.

this step is also already done. 

Hello, sbae. 

The payment field should be zero after creating a bill payment to link the vendor credit and the bank deposit. 

But if not, then I suggest reaching out to our Customer Support to further check your account. Their tools can securely get into your account to further check what’s causing the error and help you resolve it. 

You can do it by going to the Help icon at the top right of your QuickBooks Online (QBO) account. Follow the steps below: 

1. Go to the Help icon to connect to a live support agent. 
2. Click on the Contact Us button and provide some details about this concern.
3. After adding some insight, click on the Let's talk button. 
4. Lastly, select the Get a callback button to arrange a call from them.

See this article for detailed guidance: Contact the QuickBooks Online Customer Support team.

You might also want to browse these links to know more about vendor credits: 

• Enter a credit from a vendor
• Applying vendor credits

Let me know if there's anything that I can help. Have a great rest of the day!

This makes sense how to do the process, but why is it important to do it this way?

The way I would naturally think to do it is to just create a bank deposit -

> add funds to this deposit

      > enter the vendor in "received from"

      > and the "account" would be the category, product, or service you’re getting a refund for

Is there a reason the accounts payable and check/bill pay have to get involved? Thanks for any insight!

Hi. Thanks this solves the problem but honestly I'm not satisfied with this solution since it's not efficient. Why can't Intuit create an option in the "Vendor Credit" to debit to Cash or Accounts Payable?  That shouldn't be too complicated.  Thanks.

Hello there, maribeth2015.

Thanks for sharing your thoughts about the solution provided.

Being able to create an option in the Vendor Credit which allows debiting to Cash or Accounts Payable is a good idea. We're taking notes of this suggestion as we want our customers use QuickBooks in the most efficient way. 

While we continue to work in improving the product base on our customers preferences, please check out our QuickBooks Blog. From here we will post the most recent product update including the new features added in QBO.

Be sure to get back to me if you have additional questions. I'd be more than happy to assist you further. Wishing you well.

KhimG, thank you very much for your instructions (11/29/18).  They were clear and step by step.  I have been using the community as a help resource for 7 years and have seen many good and bad explanations.  Anyone looking to understand the complexities of a Vendor credit does not need a lesson in Undeposited funds nor should they need to be a professional account to understand how to use a QB item.  I was able to understand your instructions, follow them and then apply them to a case where a vendor gave a credit, deducted a bill and then wrote us a check all in one transaction.  Thank you.