Record Vendor Refund In QuickBooks – Entry Supplier Refund Cash, Credit

QuickBooks learn how to record vendor refund in QuickBooks. There are multiple scenarios according to which the method of recording the refund varies. Follow the scenario which suits your preferences. Also user can find many ways to adjust vendor refund, like if refund in the form of cash, check or even refund on credit card, debit card or direct bank account. What the user has to do with partial vendor refund or full refund by the vendor. Should I void vendor payment or should I delete a transaction on vendor refund all questions answered here.

Record Vendor Refund Issued Via A Cheque for a Paid Bill

In this scenario, we’re going to record a vendor refund in QuickBooks which was issued against a paid bill via a cheque. This is a three step method. Follow accordingly to record the refund properly.

Step 1 – Record the cheque deposited by the supplier

1. From the main menu, click on Banking.
2. Click on Make Deposits.
3. The Payments to Deposit window will appear. Click on Ok.
4. Click on Received from in the Make Deposits window. Select the supplier who sent you the cheque.
5. Click on the appropriate Accounts Payable account from the From Account dropdown menu.
6. Enter the amount refunded in the Amount column.
7. Enter additional information like payment method, class, memo, and cheque number.
8. Click on Save and Close.

Deposits can be created to record a payment made directly into the bank account. These transactions can be used for recording cheque transactions as well. After creating a deposit, you need to match it to a bill.

Step 2 – Credit The Amount By Creating A Bill

1. Go to the Suppliers
2. Click on Enter Bills.
3. Select Credit.
4. Select a Supplier/Vendor.
5. Enter all the Accounts present on the original bill by going to the Expenses
6. Enter the Amount refunded by the vendor. You may need to enter the amount on a pro rata basis.
7. Click on Save and Close.

Bills are amounts that your business owes. They are an expense usually recorded as Accounts Payable. You can use bills to record any deposits made in QuickBooks.

Step 3 – Link The Deposit Created In Step 1 To The Bill Credit Created In Step 2

1. Go to the Suppliers
2. Click on Pay Bills.
3. Mark the Deposit which is equal to the refunded amount.
4. Click on Set Credits.
5. Apply the Bill Credit to this Deposit.
6. Click on done.
7. Click on Pay Selected Bills, then Done.

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How Do I Apply Vendor Refund Check To A Credit In QuickBooks

Refund for Items Returned to the Vendor paid through Cheque

In case you’ve returned the item to the vendor and received the refund through a cheque, then you can follow the steps provided below to record the refund.

Step 1 – Record The Cheque Deposited By The Vendor

1. Go to the main menu. Click on Banking.
2. Select Make Deposits.
3. Click Ok on the Payments to Deposit
4. Click on the Received From dropdown menu on the Make Deposits
5. Select the Vendor who issued the refund.
6. Click on the From Account dropdown menu. Click on the Accounts Payable account which is applicable.
7. Enter the Refunded amount in the Amounts field.
8. Enter other relevant information. Click on Save and Close.

Step 2 – Credit The Amount By Creating A Bill

1. From the Suppliers menu, select Enter Bills.
2. Select Credit.
3. Select the Vendor.
4. Go to the Items tab, and enter the inventory items returned along with the amount refunded for each.
5. Click on Save and Close.

Step 3 – Link The Deposit Created In Step 1 To The Bill Credit Created In Step 2

1. Go to the Suppliers menu, and click on Pay Bills.
2. Select Deposit which has the same amount as that on the refund Cheque.
3. Click on Set Credits.
4. Match the Bill Credit created in Step 2.
5. Click on Done.
6. Click on Pay Selected Bills, and then Done.

Refund By A Vendor On Behalf Of The Original Vendor In QB

There are many cases in which the amount is paid to a different vendor for the items. In such a case, the refund also comes from the vendor to whom the payment was made instead of the vendor who provided the items. In other scenarios, another supplier or vendor provides the refund. Recording such refunds can be complex but are important.

Step 1 – Create a Deposit for the Vendor who provided the Refund Cheque

1. From the Banking menu, select Make Deposits.
2. Click Ok on the Payments to Deposit window.
3. When the Make Deposits window appears, click on the Received from dropdown menu and select the vendor who provided the refund cheque.
4. Click on the From Account dropdown menu. Select the Accounts Payable account appropriate for recording this transaction.
5. Enter the refund amount in the Amount field.
6. Click on Save and Close.

Step 2 – Create and Apply Bill to Deposit

1. From the Suppliers menu, click on Enter Bills.
2. Select the appropriate supplier from the Suppliers field.
3. Enter the refund amount in the Amount Due field.
4. From the Expense tab, select an appropriate Wash Account from the Amount field.
5. Click on Save and Close.
6. From the Suppliers menu, click on Pay Bills.
7. Select the Bill created by following the aforementioned steps. Click on Set Credit.
8. Select the appropriate Credit. Click on Done.
9. Click on Pay Selected Bills. Hit Done.

Step 3 – Create a Credit for the Original Vendor

1. From the Suppliers menu, click on Enter Bills.
2. Mark the radio button against Credit.
3. Select the vendor who sent the cheque from the Supplier
4. Enter the refund amount in the Credit Amount field.
5. From the Expense tab, select the account used for the original bill. The account name will be displayed under the Account field.
6. Enter the refund amount in the Amount field.
7. Click on Save and Close.

Step 4 – Apply an Invoice to the Credit

1. From the Suppliers menu, click on Enter Bills.
2. Select the vendor who sent the cheque from the Supplier field.
3. Enter a refund amount in the Amount field.
4. In the Expense tab, go to the Account Select the Wash account impacted from this refund.
5. Enter the refund amount in the Amount field.
6. Click on Save and Close.
7. From the Suppliers menu, click on Pay Bills.
8. From Bill, select Set Credit.
9. Once you’ve selected the Credit, click on Done.
10. Click on Pay Selected Bills.
11. Hit Done.

Vendor Refund Sent As A Credit Card Credit QuickBooks

The refund in these cases comes as credit card credit, which you can use for making payments directly through the credit card. The charges in the credit card are made as a credit. The payment related to the credit card can be made at the end of the month.

1. From the Banking menu, click on Enter Credit Card Charges.
2. Go to the Credit Card dropdown menu. Select the appropriate Credit Card Account.
3. Mark the Radio button against Refund/Credit radio button.
4. Select the Supplier and enter the Ref No, Date, and Amount for the transaction.
5. Enter a memo. A memo can be used to describe a transaction.
6. In case the vendor returned items, go to the Item tab and input the items returned and their amount.
7. In case the vendor hasn’t returned any items, then go to the Expenses tab and enter Amount for appropriate Accounts.
8. Click on Save and Close.

QuickBooks Refund Sent Through Cheque Which Isn’t Related To An Existing Bill

Sometimes vendors refund amounts as rewards, rebates, etc. These refunds can easily be recorded into QuickBooks by following the steps provided below.

Step 1 – Record the Cheque provided by the Vendor

1. From the Banking menu, click on Make Deposits.
2. Click Ok on the Payments to Deposit
3. Click on Received From dropdown menu from the Make Deposits window. Select the Vendor who provided the refund.
4. Select the apt Accounts Payable account from the From Account dropdown
5. Enter the refund amount in the Amount field.
6. Enter any additional information related to the Deposit.
7. Click on Save and Close.

Step 2 – Credit the amount by creating a Bill

1. From the Suppliers menu, click on Enter Bills.
2. Mark the Radio button against Credit.
3. Enter the name of the Vendor.
4. From the Expenses tab, select the Account used for recording refunds.
5. Enter the refund amount in the Amount column.
6. Click on Save and Close.

Step 3 – Link the Deposit created in step 1 to the Bill Credit created in step 2

1. Go to the Suppliers
2. Click on Pay Bills.
3. Select the Deposit created in Step 1.
4. Click on Set Credits. Apply the Bill created in step 2. Click on Done.
5. Click on Pay Selected Bills.
6. Hit Done.

These are the different scenarios according to which you can record a refund from the vendor. Recording the refund with the right steps will ensure that your books remain accurate. Failing to do so will result in incorrect reports.