A/P credit memo from vendor then vendor issued a refund check, how do I clear the credit memo out of quickbooks?

Question

I'm using Quickbooks pro 16.  I received a credit memo from a vendor (the credit memo was entered in quickbooks)  then the vendor issued a refund check for that same credit memo but subtracted out an invoice amount from the refund check.  So now the refund check is smaller than the credit memo that was entered into quickbooks.  How do I now clear out the credit memo since I received the refund check?

Rea_M · Accepted Answer

Also, the vendors account is showing an double the credit now after entering the bill credit as directed in the instructions..

You're already on the right track, @BKdk78. I've come to further guide you for recording the refund check to clear out your vendor's credit in QuickBooks Desktop (QBDT)

Before we start, I commend you for following the first two sets of instructions to record the refund check you've received from your vendor.

You may have used an expense account when recording a deposit of the vendor check that's why the deposit didn't show up on the Pay Bills page. Then, the vendor's account shows double credit after entering the Bill Credit since it isn't yet linked to the deposit. With that being said, you'll have to change the Received from Vendor Account info to Accounts Payable (A/P). This way, you can proceed in linking the deposit to the bill credit and record the refund accordingly.

You'll first have to locate the deposit by pulling up the Deposit Detail report and update the account from there. Here's how:

Go to the Reports menu.
Select Banking, then choose Deposit Detail.
Set the appropriate date in the Dates field.
Locate the deposit and double-click it to pull up its details.
Change the expense account to Accounts Payable (A/P) under the From Account column.
Click Save & Close.

Once done, go ahead and link the Deposit to the Bill Credit through the Pay Bills window. Follow the third and last set of instructions above. This time, I assure you the deposit will show up. (Please see the sample screenshot below for your reference.)

To know more about recording refunds you received from a vendor, you can refer to this article: Record a vendor refund in QuickBooks Desktop.

Also, QBDT offers a wide variety of ready-made vendor reports that tell you where your company stands, in terms of expenses and accounts payable. If you wish to know more about them, I encourage you to check out this article: Customize vendor reports.

Keep me posted on how it goes. If you have other concerns about managing vendor transactions in QBDT, please feel free to comment below. I'll gladly help. Take care always.

DivinaMercy_N · Answer

Welcome to the QuickBooks Community, @BKdk78.

I'd be happy to share the steps on how you can record the refund check to clear out your vendor's credit.

Before we begin, I suggest creating a backup copy of your file first to ensure you have the original data you can restore anytime.

Once ready, refer to these steps:

First, record a Deposit of the vendor check:

Navigate to the Banking tab and select Make Deposits.
Click OK, if the Payments to Deposit window appears. If not, proceed to the next step.
From the Make Deposits window, choose the vendor who sent you the refund on the Received from the drop-down.
In the From Account field, choose the correct Accounts Payable account.
Enter the amount of the Vendor check in the Amount column.
Input the needed details, then select Save & Close.

Next, create a Bill Credit for the amount of the Vendor Check:

Click the Vendors menu and select Enter Bills.
Tick the Credit radio button.
Choose the vendor's name.
Select the Expenses tab and enter the Accounts you would normally use for refunds. Note: If you are not sure which account to select, Intuit recommends contacting your accounting professional.
From the Amount column, enter the appropriate amount (the amounts may have to be prorated.)
When done, click Save & Close.

Lastly, you'll now need to link the Deposit to the Bill Credit:

Go to the Vendors menu and click Pay Bills.
Select the deposit that matches the vendor check amount.
Click Set Credits and apply the Bill Credit you created earlier then select Done.
Select Pay Selected Bills and then click Done.

For your reference, please see this article: Record a vendor refund in QuickBooks Desktop.

Also, in QuickBooks, monitoring your business expenses and accounts payable is a breeze. The program has ready-made vendor reports you can open at any time and customize depending on your business needs.

Post a comment below if you have any other questions about clearing out a credit memo with a refund check. I'm always here to lend a hand. Thanks for dropping by.

Sign up

Login with SSO

Login to the community

Login with SSO