Here’s How to Enter a Refund in QuickBooks Online

Last Updated on March 16, 2022

Entering refunds is equally important to maintaining the payment records. Though the refunds for most of the part are unfortunate scenarios, but not completely avoidable. Your customers might ask for a refund, and it has to be recorded in QuickBooks thereafter. On the contrary, certain purchases you made from vendors might not be up to the mark. In this situation, the refund must be recorded as a credit in your bank account. With the help of this blog, we categorize the refund process in QuickBooks Online and also discuss the steps to enter a refund in QuickBooks Online.

Follow the steps based on which division your query falls into or call experts at 1.855.738.2784 for additional Help Recording a Refund in QuickBooks

Enter a Customer Refund in QuickBooks

It is quite unfortunate for a business to send back a refund to the customer. This might be rooted in multiple reasons such as the customer is not happy with service or at times might have overpaid. It becomes essential to then enter a customer refund in QuickBooks. This is important so that transactions do not depict errors thereafter. In the case of a product return from the customer end, a credit memo is to be issued. Alternatively, if you have to refund a certain amount because of damaged goods, a refund receipt is to be issued.

You can Record the Customer Refund if it is in the following brackets:

1. The customer wishes to redeem their open credits.
2. A prepaid order of goods or services was canceled before it was delivered to the customer.
3. The customer accidentally did an over-payment and wants to reimburse that particular amount.

The Steps to Successfully Record the Customer Refund have been listed below:

1. From the Create option, click on Check or Expense.
2. Select the customer you want to process the refund for, from the Payee drop-down list.
3. Now select the bank account of the customer from the Payment Account drop-down.
4. Click on the first line of the Category column that has the Accounts Receivable.
5. Enter the amount that is to be refunded in the field for the Amount.
6. Fill out the other fields as you see fit.
7. Finally, hit Save and Close.

Go through the steps below to Link the refund to the customer’s credit or overpayment

1. First, you need to click on Create and select Receive Payments.
2. It is essential that you must select the customer that was used for the check or expense.
3. Fill in the other blank fields.
4. You will see there is a section of Outstanding Transaction, click on it.
5. The checkbox for the Expense or Check you created must be selected.
6. Ensure that the payment is the same as that of the Open Balance.
7. As the final step, select Save and close.

Enter Credit Card Refund in QuickBooks Online

It is not uncommon to see that a need may arise to return something you purchased using your business credit card. The return might arise due to damaged or wrongly-placed products. The Refund that initiates thereafter is processed on the credit card that was used to make the purchase. This credit, when reflected in your credit card statement, must be entered as QuickBooks credit card refund.

Refund a credit card payment on a sales receipt

1. Navigate to the Sales Receipt.
2. Click on More and then select Refund.
3. Hit on Yes, refund my customer.

Refund a credit card payment on an invoice

1. Select the Payment and go to More.
2. Click on Refund and finally select Yes, refund my customer.

The Process to Enter a Credit card refund in QBO can be accomplished with the following steps:

1. Select the Gear icon and navigate to the Chart of Accounts.
2. Move down to the option of the Credit Card Account.
3. You will observe a link of View Register next to the credit card account, click on it.
4. Type in the transaction type, date of the Refund, amount, and the category of the account.
5. Finally, save the credit card refund.

Create a refund receipt

1. Navigate to the Create option which is in form of an icon.
2. Click the Refund Receipt option and select the customer.
3. Make sure the Process Credit Card checkbox is checked.
4. Fill out the fields and use the info from the original sale.
5. Select Save and close.

Recording a vendor refund

The businesses make purchases from the vendors for a number of items. The vendors make sure to provide the best of service but at times, might not meet the need of business. There might be cases where the product was damaged or something similar. For such situations, the vendor needs to deposit credit to the business account. This credit is refunded in your bank account. Hence recording a vendor refund is essential to keep track of transactions. To Record a Refund Check from a Vendor in QuickBooks Online, follow the instructions given below:

1. You need to click on the Plus icon and select Bank Deposits.
2. From the drop-down list of Deposit To, click on the account where the money has to be deposited.
3. Type in the Date.
4. The following fields have to be entered:
5. Received From: Click on the vendor who sent you the refund.
6. From Account: Select the Accounts Payable account or the account used in the expense transaction.
7. Amount: Enter the vendor check amount.
8. Memo, Check No, and Payment Method fields are optional fields.
9. Hit the Save option and then Close it.

Link the deposit to a vendor credit to zero out the positive balance in your vendor’s information page

• There is Plus icon on the screen, click on it.
• Make choice from Expense or Check.
• Select the Payee.
• After the payee is selected, a window will open on right side of the screen. The window will have list of transactions made by you.
• Click on Add and finally Save and Close

Also Read: An Overview to QuickBooks Reconciliation Problems and Solutions.

Listed above are the steps to Enter Refund in QuickBooks Online, we have divided it into blocks above. In case, you are stuck at a particular step while you Enter a Customer Refund in QuickBooks or Recording a Refund Check from a Vendor in QuickBooks Online call Accounting Helpline. The customer support experts available at 1.855.738.2784 will help you to Enter Credit Card Refund in QuickBooks Online and similar tasks effectively.

Edward Martin

Edward Martin is a Technical Content Writer for our leading Accounting firm. He has over 10 years of experience in QuickBooks and Xero. He has also worked with Sage, FreshBooks, and many other software platforms. Edward’s passion for clarity, accuracy, and innovation is evident in his writing. He is well versed in how to simplify complex technical concepts and turn them into easy-to-understand content for our readers.