Sales Returns & Allowances

Hi, @gngrbrmn. I understand you want to separate refund receipts from sales receipts in your financial reports for clearer financial reporting. It sounds like you’re currently selecting the same item in the refund receipt as in the original sales receipt, which posts the refund to the same account. I’m here to provide guidance on this and point you in the right direction.

When issuing a refund receipt, selecting the same item as the original sales receipt reverses the sale recorded in the Sales of Product Income account which is the standard process for recording a customer refund. This ensures that the income and the refund offset each other, and if you track inventory, reflect the returned stock. For more details, please refer to this article: Record a customer refund in QuickBooks Online.

You can create a service item linked to the Sales Returns & Allowances account to keep refund receipts separate from sales. Then, use this new service item when making a refund.

Here's how to create the service item:

1. Go to the Gear icon, then, Products and services.
2. Select New, and choose Service.
3. Enter a name (e.g., Customer Refunds).
4. From the Income account drop-down menu, pick the Sales Returns and Allowance account.
5. Click Save.
   

Next, select this service item when issuing a refund receipt. Follow these steps:

1. Click on +New. Then, Refund receipt.
2. Choose the service item from the Product/Service drop-down list.
3. Enter the amount that matches the original sales receipt.
4. Pick the source bank account from the Refund From field, and select the payment method.
5. Review other details.
6. Hit Save and close.
   

If you're refunding an inventory item, please note that using a service item will not automatically adjust inventory levels. I recommend collaborating with your accountant to find the best way to handle this.

We also have a ProAdvisor service where you can connect with experts if you don't have an accountant yet. Type in your zip code and browse through the options on the Find My Accountant website. Most profiles also offer free consultation and can give you excellent advice.

I hope the information I've shared help clarify your concern and the steps involved. If you have further questions, feel free to click on the Reply button. We're committed to offering ongoing support. Take care!