Purchased product (expense) and resold to customer (invoice with markup). Customer paid and we paid vendor. Customer requested refund which vendor sent us. How to record?

I'm delighted to walk you through the steps for entering the customer refund and the refund you received from your vendor in QuickBooks Online (QBO), system.

To handle these accordingly in QBO, we'll have to record a refund receipt for the customer refund. Then, enter a bank deposit to your account where you've taken the expense from to enter the return sent by your vendor.

Let's start with generating a refund receipt. Please follow the steps below to proceed:

1. Click the + New menu and click Refund receipt.
2. Choose the customer you need to refund from the Customer dropdown. Then, modify the Refund Receipt Date.
3. Pick the Payment method and select the bank account where the payment was deposited on the Refund From dropdown.
4. Provide accurate information on the Service Date, Product/Service, Amount columns, and the rest of the form.
5. Double-check everything, and once done, hit Save and close.

Next, let's make the bank deposit for the returned expense amount from your vendor:

1. Go back to the + New menu and click Bank deposit.
2. Scroll down to Add funds to this deposit section.
3. Pick the bank account you've chosen as your Payment account for your expense transaction from the Account dropdown.
4. Select your vendor in the Received From column. Then, pick the Category or the Product/Service Account you've chosen to generate the expense data.
5. Fill out the rest of the form accurately.
6. Once done, hit Save and close.

Finally, I'm adding an article about how you can maximize your report to check and manage the money moving in and out of your company and bank account: Use reports to track cash flow in QuickBooks Online.

I'm always happy to provide the needed assistance. Whenever you require additional help recording the expense return or customer refund in QBO, kindly add a comment below. I'm one click away.