How to Record a Customer Refunds in QuickBooks Online

When you have to return the money you received from a customer, you may need to record a customer refund in QuickBooks Online. The information in this post will be useful if you’re unsure about “how to record a customer refund in QuickBooks Online.”

It is also used to feed the details about vendor refunds in addition to this. Therefore, there won’t be any confusion when it comes to payments if you keep records. Additionally, customers can keep their financial information up to date by recording a refund in different situations.

Steps to Record a Customer Refund in QuickBooks Online

There are mainly two steps involved in order to record the same using the Check or Expense:

Step 1: Record the Refund for Your Customer

• First, you have to begin by clicking on the +New option.
• Now you have to choose Expense, Add expense, or Check. Simply go through the steps to switch to Accountant first view if you are in a business view and then you have to move back to follow these steps
• From the Payee drop-down menu you have to choose the customer you are willing to refund.
• Inside the Payment account drop-down menu, you have to choose the bank account where you have deposited the overpayment.
• On the first line of the Category column, you have to choose an Account Receivable.
• Then you have to enter the amount how much you want to refund inside the Amount field.
• After that, you have to fill out the other fields as you can see that can fit.
• Lastly, to save the changes you have to click on Save and Close.

Step 2: To the Customer’s Credit or Overpayment Link the Refund

• You have to start by clicking on the +New option
• Now you have to choose the Receive invoice payment or Receive Payment.
• For the check/expense, you have to pick the same customer you are using.
• You have to fill out the other fields which can fit in the appropriate place.
• For the Expense or Check that you have created under the Outstanding Transaction section, you have to choose the checkbox.
• To open the balance check whether the payment is equivalent.
• Lastly, to save the changes that you have made you have to choose the Save and Close option.

Refund for Good or Services That Don’t Meet Your Expectations

As previously stated, if you request refunds rather than reducing an outstanding or a balance in the future, just issue a refund receipt for the good or service. Customers will receive vendor refund checks, which will reduce their income account if they didn’t return the item and deduct the refund amount from their bank accounts.

You can reimburse him or her using that payment method if they use a credit card or another way. Read the blog for instructions if you don’t know how to add or update acceptable credit card kinds in QuickBooks.

It’s very similar to filling out the invoice window to complete the refund receipt window. Follow the instructions below to see the refund receipt window:

• First, you have to click on the +New option
• Then choose to Give a Refund or Refund Receipt
• After that, you have to click on the dropdown menu, and to get the refund to choose the bank where you want.
• From the dropdown menu, you have to pick the Refund From, and then you have to choose the bank where you want to deposit the payment for the invoice.
• You must select the Return & Allowances option if the customer does not return any items. When a consumer is prepared to return an item, you must include all of the goods or services the customer has returned in the Product or Service column (now there is no need to choose Return & Allowances service).

Setup Return and Allowances When a Customer did not Return an item

You must set up a Return and Allowances account if your consumer failed to return an item.

• Simply assign this account to the Detail type of Discount/Refund offered and the Category type of Income to get started.
• Then on the Product and Service list, you have to set up a service.
• After that, you have to provide a name to the Product and Service such as something like customer refunds or Return and Allowance.
• Now that service has been assigned to the Return & Allowances account, check to see whether you’ve left out any prices or rates.
  • Make sure that you have filled the rate, quantity, tax, amount, and other fields correctly.
  • Lastly, to save the changes you have made click on the Save and Close option.

How to Refund a Customer’s Overpayment or Credit

How to With the help of a Check or Expense you are eligible to record a refund to your customer; the key fields are listed below:

• In case the customer wants to redeem their open credits.
• Before receiving the goods/services at their location if the customer made a prepayment for an order.
• If a customer is desiring to refund an accidental overpayment.

Refunds are recorded as a Check or Expense, which reduces your bank balance and cancels out the customer’s open credit and overpayment/prepayment.

How to Record a Credit Memo

When a customer returns the product they’ve already purchased and you and the customer agree that the customer’s outstanding and future balance will be reduced, you must record a credit memo in QuickBooks Online.

• First, You have to simply open the Accounts and Settings dialogue box. In the dialogue box you have to open Gear Menu, then Account and Settings.
• On the left, you have to click on the Advanced tab.
• On the right, move to the Automation section by scrolling down.
• Lastly, you have to click on the Automatically Apply Credits option.

As you enter the invoice window to display the Credit Memo window then entering the Credit Memo transaction is much the same as it. You have to go through the steps that are mentioned below to open the Credit Memo window.

• You have to start by clicking on the Create Menu button.
• Next, you have to select Credit Memo or from the Sales Transaction page.
• After that, you have to click on the New Transaction button and then choose the Credit Memo.
• Inside the Product/Service you have to select the customer for which you are applying a credit memo.
• With the appropriate information, you have to fill in the bottom of the Credit Memo window.
• Lastly, you have to save the transaction as the same as the invoice transaction window.

All the topics are frequently covered in this blog about recording customer refunds in QuickBooks Online. Still, if you face any issue and you are unable to fix it through this blog then you connect with Dancing Numbers expert via LIVE CHAT is available for their users round the clock. Solve your issues hassle-free.

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