Recording a refund received

deposit the refund and use Other Income as the source account for the deposit

On the P&L income is reduced by expense, so it will offset the expense

Just a deopsit? no invoice is needed?

Thanks for posting here, @userimripersiado,

I can share a few insights to help you record the refund from your vendor. If you received a refund and you want it to apply to a bill (invoice), you can create a bank deposit and use Accounts Payable as the account. You can also use a vendor credit for this process.

Please note that when you apply a credit to a closed bill, it will give you an alert to create a new bill, because there is no A/P balance to offset.

If you want to apply the credit to the original bill, you can delete and recreate the payment. Here's how:

1. Find the bill payment by going to the Expenses tab.
2. On the list, click the bill payment of the closed vendor.
3. Click on More, then Delete.
   
4. Press Yes to confirm the action.
    

Once deleted, open the Bill and apply the vendor credit or bank deposit to the payment. Here's how:

1. On the bill, click Mark as paid.
2. Mark the vendor credit in the Credits section.
3. Then click Save and close.
   

This is how the credit works after:

To learn more about this, please see this article: Applying vendor credits

If you have additional questions about applying vendor refunds, please get back to me so I can help you further. I want to make sure you get the answers you need to get this resolved. Have a good one!

I have a similar question although mine is for an expense (lawyer's retainer fee) that I gave them in 2019.

I just received a refund of my retainer fee now (2023).  How do I record this refund since it wasn't an expense in 2023?  Would I just classify it as Other income and not link it to the original expense?

Thanks in advance.

Katie