HOW TO RECORD A VENDOR REFUND IN QUICKBOOKS?

One transaction commonly enquired about on QuickBooks Support is how can one record a vendor refund in QuickBooks? In QuickBooks, the user has to enter a vendor credit to record returns to vendors and refunds from vendors. Either the vendor will provide you with a credit document stating that you no longer owe the amount mentioned in the document or will issue a refund check to you. If a credit document has been issued, enter a vendor credit and apply it while paying the vendor’s bill. And if a refund check has been issued, enter the vendor credit along with a deposit and then link it to the refund check. 

DIFFERENT SCENARIOS OF RECORDING A VENDOR REFUND IN QUICKBOOKS

Choose the scenario which applies best to your situation and follow the steps provided. 

SCENARIO 1: The vendor sends you a refund check for a bill that is already paid.

1- Record a deposit of the vendor check:

• From the Banking menu, select Make Deposits.

• Click on OK if the Payments to Deposits window comes up. 

• Select the Received From option from the drop-down menu and select the vendor who sent the refund. 

• In the From Account option, select the Accounts Payable account. 

• In the Amount option, enter the amount of the vendor check.

• Select Save & Close.

2- Record a bill credit for the refunded amount:

• From the Vendors menu, select Enter Bills.

• Select the Credit button to keep an account of the returned goods. 

• Enter the name of the Vendor.

• In the Expenses option, enter the Accounts of the original bill.

• Enter the accurate amount in the Amounts option.

• Select Save & Close.

3- Link the deposit to the Bill credit:

• From the Vendor Menu, choose Pay Bills.

• Check the deposit which matches the vendor’s check amount. 

• Select Set Credits, apply for Bill credits, and click on Done. 

• Select Pay Selected bills and tap on Done. 

SCENARIO 2: The vendor sends you a refund check for returned inventory.

1- Record a deposit of the vendor check:

Follow the same procedure as given in the first part of the first scenario. But after entering the amount of the Vendor check, enter the remaining information in the Deposit option and then Save & Close. 

2- Record a Bill credit for the returned items:

Again, follow the same process as mentioned in the second part of the first scenario. After entering the Vendor name, select the items tab and enter the returned items with the same amounts mentioned in the refund check. Save and close.

3- Link deposit to the Bill credit:

Repeat the same process as given in the third part of the first scenario. 

SCENARIO 3: The vendor sends a refund check that is not related to an existing bill.

This happens when a vendor issues rebates, refunds, reimbursements, or checks to cash out existing credit.

1- Record a deposit of the vendor check:

The first part remains similar to the steps used in scenarios 1 and 2.

2- Record a bill credit for the amount of the Vendor check:

A major part of this process remains similar to the steps taken in scenarios 1 and 2. But in the Expenses section, use the account which you normally use to record Vendor refunds in QuickBooks. If you are not sure which account to select, contact your accounting professional. Enter the amounts in the Amount column and then Save & Close. 

3- Link the deposit to the Bill credit in the same steps used in scenarios 1 and 2. 

IN CONCLUSION

These are some common scenarios QuickBooks users are faced with while recording a vendor refund in QuickBooks. Other scenarios which can arise are when a vendor sends a refund check on behalf of the original vendor or in the form of a credit card credit. To get further technical assistance, be sure to contact QuickBooks Support.

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