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A
Alan62
December 14, 2021
Question

Refunding a customer unexpected results (with refund receipt)

  • December 14, 2021
  • 1 reply
  • 0 views

A customer ordered one of my services for $100 and paid with their credit card (payment is not in QuickBooks).

 

In QuickBooks I created the Customer, an Invoice and a Payment (and applied it to the Invoice). But now the customer has cancelled their order. I have issued the refund outside of QuickBooks, but what do I do inside QuickBooks?  Do I "void", or "delete" the invoice? Do I create a "Refund Receipt", or a "credit memo"? It makes sense to me to delete the Invoice (since the service won't happen), and add a Refund Receipt (to match the refund transaction on the bank statement), so that's what I do:

 

Deleting the Invoice leaves a $100 credit on the customer's account. Next I create the Refund Receipt, and looking at the customer's transactions, the invoice is gone (good), and the refund is listed (good), but it still shows they have a balance (bad).

 

Am I using the wrong types? Should the refund be entered as a negative amount?

 

Thank you.

1 reply

H
Henock K
December 14, 2021

Hi Alan62,

Welcome to the Community. Being able to correctly record your transactions is essential in order to keep your books balanced. QuickBooks is a great programme that offers the ability to simply track sale and expenses. I'd be glad to point you in the right direction to record the refund in your account.

When you delete an invoice and keep its payment, the payment is considered as a credit for this customer. I'd recommend that you don't delete the invoice. You'd need to recreate the invoice. The best way to complete this operation is to record the invoice, its payment and the refund receipt. When you create an invoice you need to choose the product/service and it cancels with the chosen product/service on the refund receipt. Also, the invoice payment is canceled with the refund receipt because you need to choose the bank account in both transactions. 

Let me know if you have any questions, I'll be happy to help.

A
Alan62Author
January 5, 2022

Thanks for your response.  It is my understanding you are saying to do this when they order:

  1. create Customer
  2. create Invoice
  3. create Payment

 

and when they cancel:

  1. create a Refund Receipt (with the exact same Line items and bank account as on Invoice)

 

But when I look at the customer, the "Total" is not zero. That's a problem, isn't it?

T
Trish_T
January 7, 2022

Hi Alan62,

 

Welcome back!  QuickBooks Online is a dynamic program for all of your accounting needs.  I can see how recording your customer refund has become a little concerning when a negative balance is remaining.  Don't worry, I'll be happy to help you and get you back on track with your QuickBooks goals!

 

Follow these steps to balance the transaction:

 

1. From the left menu select Sales and then Customers

2. Open the Transaction List for the associated customer

3. Click on the Invoice to Edit 

4. In the top right, open the blue hyperlink for the Payment and then click on the Date to open the transaction

5. Select More from the bottom task bar and then Delete

That's it!

 

If you have any other questions, please don't hesitate to reach back out.  We'd be glad to assist!

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