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BeckyC70
May 29, 2020
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Vendor bill - 50% Payment - Returned all product - Only partial refund from vendor - Write off of balance paid but not refunded

  • May 29, 2020
  • 1 reply
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We received a bill from a vendor for product, $1,300. Our policy is to pay 50% up front and 50% once the product is fully evaluated, so we gave them a check for $650 (which they cashed). This product did not meet our standards so we returned ALL of it to the vendor. The vendor felt that they deserved some compensation for this so they only gave us a refund of $350, so we will end up having to write off the $300.

In my attempt to search for help it seemed like no matter what I typed it kept showing me the same answer, a link to 'Enter a refund from a vendor' (https://quickbooks.intuit.com/learn-support/en-us/vendor-credits/enter-a-refund-from-a-vendor/00/335902). While this is helpful, I cannot seem to figure out how to use this to accurately reflect what happened. Should I unlink the original 50% payment, then credit the entire invoice (to remove the product from our inventory)? If I do this how would I credit part of the payment and write of the balance of the payment?

I am unsure how to balance all of the pieces of this transaction cleanly in QBO. Any assistance is greatly appreciated. Thank you!

Best answer by CharleneMaeF

Thanks for getting back to us, @BeckyC70.

 

I'm here to help you write off your vendor's balance.

 

  1. Go to the + New icon.
  2. Select Journal Entry.
  3. Select the Account field and choose Accounts Payable from the dropdown list.
  4. Enter the amount under the Debit column, tab to the Name column, and select the vendor name from the dropdown list.
  5. In the next line, select the offset account and enter the amount under the Credit column.
  6. Click Save and close.

 

Once done, let's apply the journal entry to the existing debit/credit.

  1. Go to the + New icon.
  2. Select Pay bills.
  3. Choose the Payment account.
  4. Place a checkmark beside the bill created.
  5. Click Save and close.

 

Also, I suggest consulting your accountant for further assistance with the process to ensure your books are accurate for your business.

 

I've included an article that'll help you view all the money paid to your vendor for the year: Report with vendor totals.

 

Keep me posted if you have additional QuickBooks questions. I'm always here to help.

1 reply

AlexV
AlexV
May 30, 2020

Good day, BeckyC70.

 

Let me help you in recording returned products in QuickBooks Online.

 

You're on the right track! For the inventory, you can create an inventory adjustment to decrease your quantity on hand. From the + New button, select Inventory Qty Adjustment. I have an article here for your reference: Adjust inventory quantity on hand in QuickBooks Online.

 

It'd also be best to seek help from your accountant for the best way to record this.

 

I'll be here if you need anything else. Wishing you all the best!

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BeckyC70Author
June 1, 2020

Hi Alex,

I am unsure why I would create an inventory adjustment. Wouldn't a credit memo reverse the inventory? 

 

My thought is to remove the payment from the invoice (leaving it a separate transaction, I will speak to my accountant to figure out how to deal with the partial refund of our deposit). Then I will create a credit memo to clear out the invoice as all of the product was returned to the vendor (so this should adjust the inventory accordingly). If I am incorrect and the credit memo will not adjust the inventory like I am thinking please let me know.

 

Thank you,

Becky

C
CharleneMaeFAnswer
June 1, 2020

Thanks for getting back to us, @BeckyC70.

 

I'm here to help you write off your vendor's balance.

 

  1. Go to the + New icon.
  2. Select Journal Entry.
  3. Select the Account field and choose Accounts Payable from the dropdown list.
  4. Enter the amount under the Debit column, tab to the Name column, and select the vendor name from the dropdown list.
  5. In the next line, select the offset account and enter the amount under the Credit column.
  6. Click Save and close.

 

Once done, let's apply the journal entry to the existing debit/credit.

  1. Go to the + New icon.
  2. Select Pay bills.
  3. Choose the Payment account.
  4. Place a checkmark beside the bill created.
  5. Click Save and close.

 

Also, I suggest consulting your accountant for further assistance with the process to ensure your books are accurate for your business.

 

I've included an article that'll help you view all the money paid to your vendor for the year: Report with vendor totals.

 

Keep me posted if you have additional QuickBooks questions. I'm always here to help.

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