Up until now I have been processing refunds from suppliers through the banking feed, simply depositing the refund amount into the account which the original payment was made from. I got this process fro this video: https://www.youtube.com/watch?v=uQWi7-PVEl8 The problem with this is that the refund doesn't appear in the supplier transactions. I then followed this process:Step 1: Enter a supplier creditThis makes sure the credit hits the expense account you use for this supplier. Select + New.Select Supplier credit or Receive supplier credit.In the Supplier dropdown, select your supplier.Depending on how you record purchases with this supplier, enter the Category details or Item details. Usually, this is the category, product, or service you’re getting a credit for.Select Save and close.Step 2: Deposit the money you got from the refund Select + New.Select Bank Deposit.In the Account drop-down menu, select the account where you got the refund.In the Add funds to this deposit section, fill out the following fields.Received from: Select the vendor who gave you the refund.Account: Select Accounts Payable. Important: You need to pick Accounts Payable so you can tie the refund to the vendor credit. This may seem a little strange, but it’s the best way to do this.Payment method: Enter the method your vendor used to refund you.Amount: Enter the amount of your refund.Select Save and close.Step 3: Use Pay Bills to connect the bank deposit to the supplier creditEven though you aren’t paying a bill, this is the right thing to do. This last step is to keep your supplier expenses accurate.Select + New.Select Pay Bills.Select the bank deposit you just created. You’ll see the amount of the supplier credit in the Credit Applied field. The Total payment should be $0.00.Select Save and close.What seems odd is that the deposit appears now in the supplier transactions, and this means the total for the total balance for the supplier is incorrect. I'm puzzled why a bank deposit received from the supplier directly to an expense account doesn't appear in the supplier transactions, but one to the accounts receivable account does. Attached is the supplier transactions with the lines related to the refund highlighted in red. Could anyone advise if the transactions are correct for a refund and also why the deposit is in the transactions.

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Supplier refund transactions

Forum|Forum|6 years ago
April 11, 2020
1 reply
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Up until now I have been processing refunds from suppliers through the banking feed, simply depositing the refund amount into the account which the original payment was made from. I got this process fro this video: https://www.youtube.com/watch?v=uQWi7-PVEl8

The problem with this is that the refund doesn't appear in the supplier transactions. I then followed this process:

Step 1: Enter a supplier credit

This makes sure the credit hits the expense account you use for this supplier.

Select + New.
Select Supplier credit or Receive supplier credit.
In the Supplier dropdown, select your supplier.
Depending on how you record purchases with this supplier, enter the Category details or Item details. Usually, this is the category, product, or service you’re getting a credit for.
Select Save and close.

Step 2: Deposit the money you got from the refund

Select + New.
Select Bank Deposit.
In the Account drop-down menu, select the account where you got the refund.
In the Add funds to this deposit section, fill out the following fields.
- Received from: Select the vendor who gave you the refund.
- Account: Select Accounts Payable. Important: You need to pick Accounts Payable so you can tie the refund to the vendor credit. This may seem a little strange, but it’s the best way to do this.
- Payment method: Enter the method your vendor used to refund you.
- Amount: Enter the amount of your refund.
Select Save and close.

Step 3: Use Pay Bills to connect the bank deposit to the supplier credit

Even though you aren’t paying a bill, this is the right thing to do. This last step is to keep your supplier expenses accurate.

Select + New.
Select Pay Bills.
Select the bank deposit you just created. You’ll see the amount of the supplier credit in the Credit Applied field. The Total payment should be $0.00.
Select Save and close.

What seems odd is that the deposit appears now in the supplier transactions, and this means the total for the total balance for the supplier is incorrect. I'm puzzled why a bank deposit received from the supplier directly to an expense account doesn't appear in the supplier transactions, but one to the accounts receivable account does.

Attached is the supplier transactions with the lines related to the refund highlighted in red.

Could anyone advise if the transactions are correct for a refund and also why the deposit is in the transactions.

QuickBooks Online

Best answer by ChristieAnn 11

Hi there, JBR80.

If you'll not use accounts payable for the deposit, you can make a deposit in the bank account of your choice. Then use the vendor expense account as the source account. Use the same expense account when you enter/pay the bill so that the amounts will offset.

If you'll not use an expense account, I recommend consulting an accountant to help you assist in choosing the correct account for deposit the money from the vendor's refund.

Please check this article article too see what accounts are impacted when entering a Vendor/Supplier Opening Balance: How to enter outstanding balances for customers and vendors.

Let me know if you have other questions related to QuickBooks. I'm always here to help you.

MariaSoledadG

Hi JBR80,

You'll want to make sure to select the correct account for your deposit transaction so it won't show up under the supplier transactions. Let me share a few information and help you record correctly the transaction.

Ideally, only purchase transactions shows up under the Vendor tab. Choosing the Accounts Payable (A/P) account for this deposit is one of the possible ways why the transaction is showing up. You can choose a different account other than A/P.

For future reference, you can check this article for more information about A/P and A/R account: How To Group Accounts Receivable or Accounts Payable Account Types.

If you need anything else, please ping me over so I can get back.

J

JBR80Author

Hi Maria,

Thanks for taking the time to reply. If you recommend not using accounts payable for the deposit, could you tell me the sequence of transactions for a a supplier refund?

I think I have followed the quickbooks method. In raising a supplier credit, the credit shows in the accounts payable account as a paid transaction. Surely this needs to be offset by the bank deposit into the accounts payable account?

C

ChristieAnn 11Answer

Hi there, JBR80.

If you'll not use accounts payable for the deposit, you can make a deposit in the bank account of your choice. Then use the vendor expense account as the source account. Use the same expense account when you enter/pay the bill so that the amounts will offset.

If you'll not use an expense account, I recommend consulting an accountant to help you assist in choosing the correct account for deposit the money from the vendor's refund.

Please check this article article too see what accounts are impacted when entering a Vendor/Supplier Opening Balance: How to enter outstanding balances for customers and vendors.

Let me know if you have other questions related to QuickBooks. I'm always here to help you.

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