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Enter a refund from a vendor

Learn how to record a refund from a vendor in QuickBooks Online.

Just got a refund for a business expense? We'll show you how to create a vendor credit.

How you enter the refund depends on how you record your purchases. Choose the section below that applies to you. If you’re not sure, ask your accountant. Or, we can help you find an accountant.

Step 1: Enter a vendor credit

This makes sure the credit hits the expense account you use for this vendor.

  1. Select + New.
  2. Select Vendor credit or Receive vendor credit.
  3. In the Vendor dropdown, select your vendor.
  4. Depending on how you record purchases with this vendor, enter the Category details or Item details. Usually, this is the category, product, or service you’re getting a credit for.
  5. Select Save and close.

Step 2: Deposit the money you got from the refund

  1. Select + New.
  2. Select Bank Deposit.
  3. In the Account drop-down menu, select the account where you got the refund.
  4. In the Add funds to this deposit section, fill out the following fields.
    • Received from: Select the vendor who gave you a refund.
    • Account: Select Accounts PayableImportant: You need to pick Accounts Payable so you can tie the refund to the vendor credit. This may seem a little strange, but it’s the best way to do this.
    • Payment method: Enter the method your vendor used to refund you.
    • Amount: Enter the amount of your refund.
  5. Select Save and close.

Step 3: Use Pay Bills to connect the bank deposit to the vendor credit

Even though you aren’t paying a bill, this is the right thing to do. This last step is to keep your vendor expenses accurate.

  1. Select + New.
  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. The Total payment should be $0.00.
  4. Select Save and close.

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