How to record a refund check from a vendor in QuickBooks online?

Hi there, we have a few vendors paid on advance terms as they need 10-15 days to assemble and deliver the finished products. Similarly, we take some percentage of the product cost along with the purchase order from our customers. This was an unusual situation where in 2 customers cancelled their orders in a couple days. Subsequently, we had to get the orders cancelled with our vendors being a special category and rarely sold products. The vendors wrote us the refund checks against the order cancellation. What is the best way to record a refund check from a vendor in QuickBooks online? In order to avoid the accounting errors in my QuickBooks.

Asked on February 18, 2020 in Company File.
1 Answer(s)

Hi there, Welcome to our QuickBooks Community and thanks for reaching out to us. Let me quickly share the simple tips to correctly record a refund check from a vendor in QuickBooks error-free. In order to process a refund from a vendor in QuickBooks. I am also considering a scenario to prevent you from any confusion recording vendor refunds in QuickBooks. You may have an actual refund deposit transaction from your bank, downloaded/imported in QuickBooks against the deposit that you could have or will deposit in your business checking account. On the other hand, how you enter the vendor refund in QuickBooks varies basis how you record your purchases in your QuickBooks.

Step -1: Create Vendor Credit for the refund amount.

Step -2: Create a Deposit to set that vendor to Accounts Payable.

Step- 3: Link the Vendor Credit to Deposit using Check/Expense/Pay Bills.

(That makes a zero balance transaction in the vendor expense account)

On the other hand, how you enter the vendor refund in QuickBooks varies basis how you record your purchases in your QuickBooks. Hope you found this information helpful and apply to your query and requirements. If you still have doubts, please call our QuickBooks Support Number for instant help. For more help articles, for more QuickBooks Help articles please visit

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Answered on February 21, 2020.

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