Handling Refunds | Post Your Question Below

Hi, I am trying to follow this guide on how to categorise a supplier refund that appeared as a bank transaction:

https://quickbooks.intuit.com/learn-support/en-uk/help-article/supplier-credits/enter-supplier-credi....

In Step 1, point 4, the instructions advise to select the 'Creditors' account, however, I can't see that account in my chart of accounts - is there a different account I would use, or is there a different method?

Many thanks!

Simon Osborn.

Hello Faber Laser Co, thanks for posting on this thread, so you should have a default account this is called creditors in your account or it might be named accounts payable.

Hi Ashleigh,

Thank you for the reply - I have attached my chart of accounts. Could you identify it for me? I may be missing it or perhaps the name is different for some reason.

Thanks for the prompt response, @Faber Laser Co. I'd be glad to assist with how to see the creditors account so you can handle your supplier refunds properly.

In QuickBooks Online (QBO), the creditors (Accounts/Payable account) will appear in your Chart of Accounts (COA) once you have recorded outstanding bills that your business owes. If you're subscribed to QBO Essentials, Plus, or Advanced, you can create a sample bill transaction and delete it afterward to see the Creditors account.

Otherwise, we can manually add it to proceed with handling your refunds it's not showing in your COA. Here's how:

1. Go to the Gear icon, and select Chart of Accounts.
2. Click the New button.
3. Choose Creditors in the Account Type and Detail Type.
4. Change the Name if you want to, and tap Save and Close.
   

Moreover, please note that the steps in the article may not work if you're using the QBO Simple Start version because it doesn't include the feature to manage bills and bill payments. 

Additionally, check out this article for the detailed steps in case you need to review all your vendor transactions in QBO: View supplier transactions.

Get back to me if there's anything else you need to help manage your supplier transactions in QBO. I'll be around to help you.

Hello, we bought some goods from a UK supplier that were shipped to the EU. A week after paying the invoice I received a refund for the VAT - how can I record/categorise this on QuickBooks online. The only way I can find so far, is to make a supplier credit supplier with a value of £0.01, then change the VAT amount to the refund amount minus the £0.01. Is this the best way? Many thanks 

Hello there, @lubratt. I appreciate you sharing your workaround for categorising/recording VAT refunds in QuickBooks Online (QBO). 

Rest assured, I'm here to provide you with the best way to record the VAT refund in QuickBooks. This method eliminates the need to create a supplier credit with a value of £0.01.

Let me walk you through the steps for a seamless process:
 

1. In your QBO account, go to the Taxes tab, then select VAT (Take me there).
2. Select the All returns dropdown menu, then choose the specific VAT period you need.
3. Click on the View summary dropdown menu, then select Record Refund.
   
   
    
4. Select the bank account the refund has gone into.
5. Make sure you've selected Refund under Payment Type.
6. Enter the refund date and amount in the appropriate fields.
7. Add a memo if needed. Once ready, click on Save.
   
   
   
   

For detailed information, kindly visit: Record a VAT payment or refund in QuickBooks Online.
 

Furthermore, I recommend referring to this article that provides guidance on how to adjust your VAT liability using QuickBooks: Make VAT adjustments in QuickBooks Online.
 

I'll be here if you've got additional queries regarding taxes in QBO. It's always my pleasure to be of assistance. Take care.

How to allocate a supplier credit note against existing supplier invoices

Hi,

We have a set DD for a new power supply company, however those DD greatly exceeded out usage and after 3 months of pain of reconciling bank we've asked supplier to refund the amount that has been overpaid, which they did.

Now:

• I've created a supplier credit with the refunded sum (which displays with negative value in our QBO)
• I've added bank deposit with the sum they refunded

But I cannot complete the step 3. for adding expense/cheque. I've gone as far as selecting the vendor and accounts but when I try to + Add to Expense any of the bills or credits on the right hand side, a message pops up saying "You cannot add a credit for a supplier without any open bills".

What am I doing wrong here?

Thanks in advance!

Marta

Hi Marta, thanks for joining this thread with such detailed information. You won't need to enter an open bill to record the supplier refund. 

Please check that the bank deposit has the default account for Creditors (or Accounts Payable) selected in the Account field, with the supplier selected under Received from. 

When linking to supplier credit and bank deposit create a Cheque (via + New transaction on the supplier page). The panel on the right will then allow you to add the two transactions. 

If you're still unable to complete this, please contact our chat support. They'll have the tools available to set up a screen share to view this with you. 

Thank you!

Looks like I've put it under wrong account. Now that I edited deposit to go in Creditors it finally allowed to apply debit and credit in step 3, which is great!

However, the account still displays the original credit amount as open balance before they made the refund, I assumed this would clear? Feels like I'm back on square 1.

I've attached screenshot of transactions and account balance

I am trying to do the same, I have created the deposit but it does not appear when I try to create the cheque to match the deposit and credit note.

Hi Simon1003, please double-check the bank deposit is posting to the default QuickBooks account for Debtors (or you may see this as 'Accounts receivable) and that the correct customer has been selected in the Received from field.

Hi Marta JES, great - thanks for checking that. The screenshot shows how we would expect this to appear. Are there any other unapplied payments or credits showing on the supplier transaction list? To check for any browser issues that may be causing this, please also try logging into QuickBooks via a different web browser or incognito window. 

How do i process a refund against customer to get a zero balance

Hello, Edward111.

Thank you for reaching out to the Community. Processing a refund against a customer in QuickBooks Online is a simple process that can be completed in just a few steps. To begin, we can create a credit note and locate the customer you need to process the refund.

Create a credit memo:

• Select "+ New" and then "Credit Note."
• Choose the customer for whom you want to issue the refund.
• Enter the amount to be refunded in the "Amount" field.
• Save and close the credit note.

Once done, create a receive payment to apply the credit note to the customer's invoice. If the customer has multiple outstanding balances, ensure you enter the correct amount to be refunded to avoid confusion. 
 

• Select "+ New" and then "Receive Payment."
• Choose the customer and ensure that the total credits equal the credit note and invoice listed under "Outstanding Transactions."
• Tap the credit note and invoice checkboxes in the "Outstanding Transactions" section.
• Save and close the transaction.

Once done, QuickBooks Online will automatically update the customer's account balance to reflect the refund, and the customer's account balance should now be zero. 

Additionally, here's an article on how to apply a refund to a customer you process through QuickBooks Online.

Keep in touch if you need further assistance managing customer transactions in QuickBooks. I'll be around to help you more. Have a wonderful day, and stay safe!

Hi, my client accidentally overpayed me. I refunded them via my bank. But now my QuickBooks account is saying they have credit due to this overpayment. How can I categories this as a refund so that the balance is correct?

I've already sent them a refund receipt but that hasn't made a difference, the overpayment is still showing up.

Thank you.

Thanks for joining the thread, @Ellie92.

I'll help you handle customer's overpayments in QuickBooks Online.

We can record the transaction using a Cheque or Expense. Thus, it offsets the credit balance that is shown in QBO. Once you're ready, here's how you can do it: 

1. Click +New, then choose Expense.
2. Select the customer you want to refund from the Payee ▼ dropdown.
3. Choose the bank account you want the overpayment deposited to from the Payment account ▼ dropdown.
4. On the first line of the Category column, select Debtors (Accounts receivable).
5. From the VAT field, select No VAT.
6. Enter how much you want to refund in the Amount field.
7. Fill out the other fields as you see fit, then select Save and close.

Once done, you can follow Step 2 from this article to link the refund to the customer's credit: Record a customer refund in QuickBooks Online.

If you want to make a credit into a tip, feel free to visit this resource: Record an invoice overpayment as a tip.

If you have more questions about customer transactions in QBO, I'd be glad to lend a helping hand. Take care always, and happy holidays.

Hi ,

I have issued a credit note to a customer and have partly adjusted to next invoice. Now customer wants the refund for remaining amount and I can not find a way to adjust this additional credit  payment in QuickBooks.

Please help

I'll make sure you can adjust the additional credit payment in QuickBooks Online (QBO), usermaw. 

You can create a cheque or expense for the customer refund affecting accounts receivable (debtors account). Once done, link it to the credit note using Receive Payments. You can follow the steps provided by my colleague above on how to create a cheque.

I've added screenshots for your reference. 

Additionally, here's an article that provides tips on handling a customer credit or overpayment in QuickBooks Online: Learn what to do in QuickBooks Online when a customer overpays you.

That helps you out! Tap me on my shoulder if you have more concerns about applying for credits in QuickBooks Online. I'll be around to help. Take care and stay safe.

Hello

I am trying to match a Suppliers refund with their credit note.

Credit note raised

Bank deposit raised

But when I select 'Cheque' to match credit  note and bank deposit - only the credit note appears on the right to 'ADD' not the bank deposit.

Please advise

Thanks

Thanks for joining this thread, S and C Brickworks
 

Please check that the bank deposit has the correct supplier selected in the received from field, and that the default creditors (or accounts payable) account selected in the account field (under Add funds to this deposit). :)

Thank you so much Georgia

I was using the wrong 'Account', found the correct one and Deposit appeared for customer.

So all sorted