So I am new to QB. I am doing invoices day to day and sometimes I have returns/reimbursements on invoices from the previous year. How should I process these in QB?
Right now my employer has me going back to the original invoice and just adding the return on there to 0 out the invoice, and then when the "reimbursement" from the purchase comes in, we add it back to the invoice. The problem is, it's now the end of the year, and we are getting those returns & reimbursements for purchases made in 2021, and we don't want to mess up taxes that are already done. How should these be done properly in QB?
I've told them that we need to do a return/credit instead of adding it to the original invoice, and then create a new invoice when the reimbursement comes in to show that separately. This separates it from the old invoice so it doesn't mess it up, but they don't want to trust that yet.
We are working on Amazon invoices if that makes a difference.
Thanks for choosing QuickBooks Desktop (QBDT) as your accounting partner.
Yes, you can record the reimbursement from 2021 by creating credit to avoid messing up the previous year's data. Then, create a new invoice for the reimbursement to separate it from the old transaction.
Before doing so, I'd highly suggest reaching out to your accountant to ensure everything will be recorded correctly. This way, we can avoid mistakes since this involves past transactions. If you're not affiliated with one, you can utilize our Find an Accountant tool to look for one near your area.
Just so I understand, this is for sales/returns to/from customers for items sold through Amazon? Also, you're using invoices and not sales receipts? Is there a reason for that? Invoices are designed to be used when a customer will pay at a later time and a sales receipt is used when a customer pays at the time of the sale.
Ideally, you would enter a sales receipt when the sale is made and a sales receipt when the return is received. This keeps each transaction in its proper period. As you suspect, going back to the original invoice and adjusting it is not the best way to do it because it can reduce income in a prior period if you're an accrual basis taxpayer. Your employer can reduce their income to allow for sales returns and allowances but they should consult their CPA if they don't use that method already.