You just received money back from a vendor, now what? It’s important to differentiate in QuickBooks® Online why you’re receiving the money in the first place. Is it a refund or will it be used to buy something from this vendor again in the future?
You received a refund, “how you enter the refund depends on how you record your purchases.” If you used an expense account you have to …
Step 1) select Vendor Credit to make sure it hits the correct account.
Vendor > Select Vendor > either Category Details or Item Details > Save and Close
Step 2) select Bank Deposit to deposit the refund into the bank
Account > Select Account > Add funds to deposit section and complete the following fields:
-Vendor (Who gave you the refund)
-Account: MUST BE ACCOUNTS PAYABLE “so you can tie the refund to the vendor credit”
-Save and Close
Step 3) “The last step is to keep your vendor expenses accurate”
Pay Bills > Select the recently created bank deposit > Credit Applied – Total Payment=$0.00 > Save and Close
If you’ve received a vendor credit to be used for future purchases, “determine first how you record your purchases.”
If you enter bills to pay later …
Step 1) Vendor Credit > Choose your vendor > enter Category Details or Item Details > Save and Close
Step 2) Apply Credit to a Bill > Pay Bills> Identify Bill then verify Credit Applied > Complete Rest of Fields
If you enter expenses or write checks
“To track credits for your vendors, you should consider entering bills in QuickBooks. This way you can track your account balance and credits using Accounts Payable. Otherwise, you can enter a note to remind yourself about this credit in the future.”
Disclaimer: The information provided in this article is intended only to be used as a general guide. Always consult with a CPA and/or a professional accounting service provider with questions/concerns.
Business Support Services Northwest is based in Bellingham, WA. It provides Payroll and Business Report services to small and midsize companies as well as Financial and Managerial Accounting Support services through its consulting division, ProFound Impact. Learn more