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tlheah
Level 3

Good day, Regarding the standard answer of doing customer refunds, creating Expense follow by Receive Payments, it seems to be wrong. The funds goes out and comes back

We are doing a refund to the customer, the funds doesn't comes back to our bank account. But recording it this way the funds comes back to our account when entering Receive Payments. Please assist
5 Comments 5
SarahannC
Moderator

Good day, Regarding the standard answer of doing customer refunds, creating Expense follow by Receive Payments, it seems to be wrong. The funds goes out and comes back

Hope you're doing good, @tlheah!

 

QuickBooks is only for recording purposes. With that, all money in and money out should be recorded in the right way. This way, your accounts and transactions will remain accurate or balance. 

 

Recording a customer refund in QuickBooks Online has different ways depending on the scenario.

 

If a customer asks for a refund for an item or service, you can use refund receipts. Here's how:

 

  1. Go to the + New button.
  2. Select Refund receipt or Give refund.
  3. Choose the customer you want to refund.
  4. In the Refund From dropdown menu, select the bank you deposited the payment for the invoice to.
  5. Add all products or services the customer returned in the Product/Service column.
  6. Make sure to fill the date, quantity, rate, amount, tax, and other fields accordingly.
  7.  Once done, select Save and close.

 

On the other hand, if you're trying to refund a customers that has paid invoices, I'd recommend follow the steps and instructions in this article: Record a customer refund in QuickBooks Online.

 

If you want to pull up a report that shows all the refund receipts that you've processed, you can generate the Transaction List by Customer report.

 

  1. Go to Reports menu at the left panel, then type Transaction List by Customer on the search bar.
  2. Click Customize on the upper right. Include all the details you need.

 

To learn more about handing reports, you can check these articles:

 

 

I'll be around if you still need assistance, tlheah. Take care and stay safe!

tlheah
Level 3

Good day, Regarding the standard answer of doing customer refunds, creating Expense follow by Receive Payments, it seems to be wrong. The funds goes out and comes back

Thanks for your reply.

 

The problem is these methods don't work.

 

1. Refund Receipts (and Credit Notes) can only insert Products / Services. Not able to insert Category in them. Goods are not returned to us, we only issue a refund from our bank account.

2. Your standard answer guide us to enter as Expense followed by Received Payment. But these cause the refund to be transferred back into our bank account. Expense - the amount is deducted, but Receive Payment sends it back.

Hope for your advice on this

Angelyn_T
QuickBooks Team

Good day, Regarding the standard answer of doing customer refunds, creating Expense follow by Receive Payments, it seems to be wrong. The funds goes out and comes back

I appreciate you for getting back, @tlheah. I can share with you some additional information about giving a refund to customers in QuickBooks Online (QBO).

 

Once the invoice has been paid and you want to give it back to your customer, you can issue a refund or write a check/expense transaction for this. The process reduces your bank's balance and offsets the customer's open credit, overpayment or prepayment.

 

The next step is to record a Receive Payment transaction with 0 balance to cancel the payment and the expense out.

 

Here's how:

 

  1. Go to + New and select Receive payment.
  2. Add the Customer and choose the Payment method and Deposit to.
  3. The balance should be 0 as they will cancel each other out.
  4. Select Save and close.
  5. If you have online banking, go to the Banking page and match the record found.

 

If you need help with the process, you can always consult with your accountant. He or she can give you additional options on how to track your entries accordingly.

 

You can also check out the resources from this link on how to return your customer's money: Record a customer refund in QuickBooks Online. This also gives you an idea of how to issue a refund if:

 

  • invoice has been paid
  • goods or services didn't satisfy the customer
  • a customer has overpayment or credit

 

For more tips, while handling your other customer entries in the future, you may consider checking out the resources from this link: Manage Customers and income for QBO International.

 

If you have any other questions about issuing a refund to your customer, let me know by adding a comment below. I'm more than happy to help. Keep safe!

tlheah
Level 3

Good day, Regarding the standard answer of doing customer refunds, creating Expense follow by Receive Payments, it seems to be wrong. The funds goes out and comes back

Yes, thats exactly what I did. I issued an Expense, with Trade Payables / Receivables in the Category, and money out from my bank account


But when I do a Receive Payment to close this, the money goes back into my bank account.

Please advise.

Rea_M
Moderator

Good day, Regarding the standard answer of doing customer refunds, creating Expense follow by Receive Payments, it seems to be wrong. The funds goes out and comes back

Thanks for the immediate response, @tlheah. Let me share further details about doing customer refunds by creating an expense transaction followed by processing receive payments in QuickBooks Online (QBO).

 

When the customer's invoice has been paid and you want to refund them, you'll first have to enter a Credit note. This will record the category you’re getting credit for. This process is necessary before issuing an expense.

 

However, in case the customer has overpaid, you do not need the credit note as you will already have an unapplied credit that acts as your credit note. This way, you're able to keep your financial data updated.

 

To learn more about the process above, you can refer to this article: Record a customer refund in QuickBooks Online. It also includes other scenarios on how you can refund a customer in QBO.

 

Also, to further guide you in managing customers and income transactions in QBO, I'd recommend checking out this article: Help Articles for Income transactions in QuickBooks. It includes topics about customer refunds and adding discounts to invoices, to name a few.

 

Let me know if you have other concerns about customer refunds and managing income and expense transactions in QBO. Please don't hesitate to comment below, and I'll gladly help. Take care always, @tlheah.