How to enter a refund from a vendor

Hello there, @neyerbj. Welcome to QuickBooks Community! I'd be delighted to assist you in entering a refund from a vendor in QuickBooks Desktop. 

If a vendor sends you a refund check for a bill that is already paid, you can follow these steps below.

First, record a deposit from a vendor check. Here’s how: 

1. Go to the Banking menu, then select Make Deposits.
2. If the Payments to Deposit window appears, select OK.
3. Go to the Make Deposits window, select the Received from drop-down and choose the vendor who sent you the refund.
4. In the From Account drop-down, select the appropriate Accounts Payable account.
5. Then, in the Amount column, enter the actual amount of the Vendor check.
6. (Optional) Enter a memo, check number, payment method, and class.
7. Select Save & Close.

From there, you can now record a Bill Credit for the refunded customer. Let me guide you on how: 

1. From the Vendors menu, select Enter Bills.
2. Click on Credit radio button to account for the return of goods.
3. Enter the Vendor name.
4. Then, select the Expenses tab and enter the Accounts on the original bill.
5. In the Amount column, enter the appropriate amount for each Account (the amounts may have to be prorated).
6. Select Save and Close.
   
   

Lastly, link the deposit to the Bill Credit. Here’s how: 

1. From the Vendors menu, select Pay Bills.
2. Check the Deposit that matches the Vendor check amount.
3. Select Set Credits and apply the Bill Credit you created earlier then select Done.
4. Select Pay Selected Bills, then select Done.
   
   

Here's an article you can refer to for more recommended steps in each scenarios when recording refunds you received from a vendor: Record a vendor refund in QuickBooks Desktop. 

Keep me posted if you still have questions or concerns about managing vendors in QBDT. I'll be around for you. Have a great day!

@neyerbj 

So, you have a couple of options:

1) If you don't care that the refund is showing under the insurance co. in the Vendor Center, then just deposit the check and assign the insurance expense account(s) under "From Account".  This will book the bank deposit and a corresponding reduction in the insurance expense account(s) that you assigned to the deposit.  If you go this route, just know that the transaction will not show when running reports by vendor but your financial statements will be correct. 

2) If you want the refund to show in the Vendor Center and show up in reports for the vendor, then you need to follow the directions from @Carneil_C .  The directions are accurate.  First, make a deposit and assign the deposit to accounts payable under "From Account".  Then create a bill credit.  Make sure you enter a bill credit and not a bill.  When you enter the credit, this is where you are recording what account the refund is credited to.  Assign the insurance expense account that the refund should be applied to.  Then, go to Pay Bills.  You will see the deposit in the Pay Bills screen, select it.  Then you will see the bill credit down toward the bottom of the screen.  The amounts should match if you entered the same amount for the deposit and the bill credit.  Click "Set Credits".  Select the credit in the Apply Credits pop-up.  Select Done.

That's it.