Skip to main content
Apr 6, 2020 1:50 AM UTC
Solved

How to record credit/refund back from inventory purchase

Hello,

I have my product expense account to "Cost of Good Sold"  & inventory as "inventory asset" when creating the product/service. Then PO/Expense it out using that product. Month later, i got a credit/discount from the same vendor, without having to return the item they gave me a price match discount since i paid a much higher price at the time of ordering. My question is the credit within the credit card bank feed. I notice making a credit card credit would not work since you need to input a qty higher then 0 which mines has nothing returned, so only other way out i can think of is just categorizing it within the feed without a match.

vpcontroller
Apr 6, 2020 2:15 AM UTC


@mikelu9661 wrote:

Hello,

I have my product expense account to "Cost of Good Sold"  & inventory as "inventory asset" when creating the product/service. Then PO/Expense it out using that product. Month later, i got a credit/discount from the same vendor, without having to return the item they gave me a price match discount since i paid a much higher price at the time of ordering. My question is the credit within the credit card bank feed. I notice making a credit card credit would not work since you need to input a qty higher then 0 which mines has nothing returned, so only other way out i can think of is just categorizing it within the feed without a match.


"How to record credit/refund back from inventory purchase"

 

Great question!

 

What you need to do is edit your original entry.

Let's say for this example, you paid $1,000 total for inventory items.

And now, they gave you a $200 credit/refund. Your new net cost is $800.

 

Go back to your original entry and make an adjustment:

  • Item Details section = $800 total for inventory items (this is your revised new inventory cost)
  • Category Details section = $200 for refund/receivable from Vendor (create a new account. Account and Detail type = Other Current Assets. Name something like Credit/Refund Receivable.)
  • You originally paid = $1000

This entry shows although you originally paid $1,000, $800 for purchased items and vendor owes you $200.

 

"My question is the credit within the credit card bank feed"

Use New account "Credit/Refund Receivable" for $200 in this example. That account should have zero balance with "in and out" transactions now.

 

Hope this helps!

 

 

7 replies

vpcontroller
Apr 6, 2020 2:15 AM UTC


@mikelu9661 wrote:

Hello,

I have my product expense account to "Cost of Good Sold"  & inventory as "inventory asset" when creating the product/service. Then PO/Expense it out using that product. Month later, i got a credit/discount from the same vendor, without having to return the item they gave me a price match discount since i paid a much higher price at the time of ordering. My question is the credit within the credit card bank feed. I notice making a credit card credit would not work since you need to input a qty higher then 0 which mines has nothing returned, so only other way out i can think of is just categorizing it within the feed without a match.


"How to record credit/refund back from inventory purchase"

 

Great question!

 

What you need to do is edit your original entry.

Let's say for this example, you paid $1,000 total for inventory items.

And now, they gave you a $200 credit/refund. Your new net cost is $800.

 

Go back to your original entry and make an adjustment:

  • Item Details section = $800 total for inventory items (this is your revised new inventory cost)
  • Category Details section = $200 for refund/receivable from Vendor (create a new account. Account and Detail type = Other Current Assets. Name something like Credit/Refund Receivable.)
  • You originally paid = $1000

This entry shows although you originally paid $1,000, $800 for purchased items and vendor owes you $200.

 

"My question is the credit within the credit card bank feed"

Use New account "Credit/Refund Receivable" for $200 in this example. That account should have zero balance with "in and out" transactions now.

 

Hope this helps!

 

 

Apr 6, 2020 2:22 AM UTC

Hello,

I'm sorry, but I'm totally confused, do you perhaps have a step by step illustration guide i can follow upon? as if I edit the original expense from $1000 to $800, it would not match with the feed of the original charge if that's what I'm being told to do.

DivinaMercy_N
Apr 6, 2020 10:07 AM UTC

Hi, @mikelu9661.

 

I'll guide you on how to create a vendor credit:

  1. Click the New button.
  2. Under Vendors, select Vendor credit. 
  3. Choose the name of your vendor.
  4. On the Category column, choose Credit/Refund Receivable and $200 for the Amount.

To create a new account according to @vpcontroller please refer to the screenshot below: 
 

       5. On the Product/Service column, enter the product and $800 for the Amount. 

 

You can also check this article for more detail: Enter vendor credits and refunds in QuickBooks Online.

 

That shall do it. If you have further questions please don't hesitate to post a questions below. I'll appreciate the opportunity to help.