QuickBooks is an inevitable accounting software, which helps in getting paid by the customers. This robust application is underpinned with a myriad of be spoke Invoice Templates for billing customers as well as sales receipts to track the sales of any business. It also provides the facility for online payments. For this, the QuickBooks users have a freedom to accept debit or credit cards and electronic checks. Above all, it makes the job easy and hassle-free to record payments while providing the reports which allows you to keep track of it. We will elucidate all the information in this article. Please be with us till the end.
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How to Give a Refund to a Customer in QuickBooks?
Who likes to issue the refund in business? I guess no one right? We issue the refund check if the customer is not happy with the service or product which we have provided to them. We have to record that transaction accurately into the business accounts, and you would be glad to know that QuickBooks provides this feature. In this article we will show three ways to issue the refund to the customer as you may expect, this entire process is a combination of easy and difficult.
- Firstly you need to hit on the “Banking” menu and choose the “Write Checks“.
- Secondly, In the drop-down list choose the option of the “Bank Account” and then choose the checking account.
- Navigate to the drop-down list and now select the option of the “Pay to the Order of” and select the required customer.
- Now opt for the “Date” and enter a new date, if required, and there after type-in the amount of the refund check into the “$” field.
- Go to the “Accounts Receivable” option from the “Accounts” drop-down list in the “Expenses” tab.
- Hit on the “Save & Close“.
- Now move forward to click on the “Customers” menu and choose the “Receive Payments“.
- In next step, click on the “Received From” and choose the customer receiving the refund from the mentioned list.
- Now opt for every transaction you required to apply a credit in the register.
- And now hit on the “Discounts & Credits” option and choose every credit you are required to include on the check, and then hit on the “Done” option.
- And finally you are required to hit on the “Save & Close” on the Received Payment window.
Single Item Refund Check
- Go to the “Customers” tab and opt for “Create Credit Memos/Refunds“.
- Now from the drop-down list of the “Customer: Job” you are required to select the customer.
- Now in to the first blank row of the item column you need to mention the item returned or click the row, choose the down arrow and choose an item from the list.
- There after, Opt for “Use Credit to Give Refund” option in the toolbar press “OK“.
- In the final step you need to hit on the “Save & Close” on the Create Credit Menu/Refunds window.
- Firstly, Navigate to the “File” menu, Choose “Print Forms” and select the “Checks“.
- After that, Hit on the checkmark column next to each check you are required to print and choose the “OK” button.
- Now, Select the printer you wish to use from the “Printer Name” drop-down list in the “Settings” tab.
- Here in the last and final step you are required to opt for the “Standard” from the Check Style section and hit “Print“.
What is a Credit Memo?
A credit memo can be defined as a commercial document issued by a supplier to its customer. Credit memo is also used as the source document for the journal of sales return. To put it simply, credit note is an evidence of the reduction in sale or we can say that a customer returns an item for which they have made the payment, and you have to credit the customer for the cost they have paid. This is the more complicated of the two and needs more bookkeeping, as you are making the record of the sale, its payment, and the return item. You can deal with the amount of the credit by below given three ways:
- Issue the refund.
- Apply the credit to the open invoice.
- And the other way is to retain the funds in the customer account.
Step 1: Create a Credit Memo
- Firstly, You need to choose the Create Credit Memos/Refunds from the Customers menu.
- Secondly, Choose the customer from the drop-down Customer:Job
- Now, In the last step mention the list of products you are paying the credit for, then choose Save & Close option.
Step 2: Make the Decision how You Wish to handle the Credit
Here are three ways mentioned-below, and you need to select one of them from the available Credit window and choose OK.
Make a Refund: Here is the option that you can issue the refund in form of cash or a check. However, if the payment made by customer using the credit card, you need to know how to refund a credit card payment that we will know about later in this module. Here are the steps given which you are required to adhere while making the refund:
- Choose the OK option if the check is filled out automatically.
- Now, navigate to the Customers menu and then choose Receive Payments and link the check to the overpayment.
- Select the customer in the Received from drop-down and then, choose the Discounts and Credits icon.
- Choose the check which you have created and after that hit done in the Available Credits section.
- Here are chances that you might be able to see the pop-up to Confirm transfer. If you see the pop-up you are required to choose Yes. The amount will be applied automatically to the invoice.
- And lastly, click Save & Close.
Apply a Credit to an Invoice: QuickBooks opens the Apply Credit to Invoices window. You need to choose an invoice you wish to apply this credit to.
- Kindly ensure to select Customer: Job when you create the credit memo. After that a window will be open which says Apply Credit to Invoice.
- Now, lastly choose the credit you wish to apply automatically and choose Done once the above steps are completed.
Retain as an Available Credit: QuickBooks enters a -VE amount in the Accounts Receivable (A/R) register for the credit memo. This credit can be used for upcoming transactions. If you select to retain as available credit, the available credits options will be visible in the customer payment window. Receive payments window will be available.
- Choose the Customers and then Receive Payments.
- Now you need to choose the customer from the Received from drop-down and after that choose the Discounts and Credits icon.
- Check the credit you wish to apply in the Credits tab, check the credit you want to apply.
- A pop-up might be visible to Confirm transfer. Choose the yes option if you see the pop-up. The amount will be applied automatically to the invoice.
- Now, in the final step choose the Save & Close option.
Having the Overpayments in Your Business?
For an instance, if the customer is having multiple outstanding invoices and he/she makes the payments in total for all the invoices, but the payment is overpaid by the customer. Now open the Receive Payments window by navigating to the customers option and Receive Payments or clicking Receive Payments on the home page. Now, choose the customer and enter the Payment Amount and Check number. QuickBooks accounting software will have put a checkmark in front of all the outstanding invoices listed to indicate that the payment has been made against hose invoices.
You will see the option of overpayment in the lower left corner. The extra amount and your two options for dealing with it will be visible here. Here you have two options: one is to credit the customer and other is to issue a refund. Now choose the option you wish and save the transaction.
You can also issue refunds with the Write Checks window, however it is easier to process a credit memo as the write check is a more complicated procedure.
We have covered the maximum information in this article. However, If you are still not clear with your query or have any questions related to what we have mentioned in this article, you can always reach out to us without any hesitation at our Dancing Numbers LIVE CHAT options. There might be the chances of customer dissatisfaction if the refunds or credits that come through incorrectly and as a result future business sales can be effected.
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+1-800-596-0806 or chat with experts.