Categories
Credit Memo Customers

How to handle a refund to a customer for merchandise not received?

Refund to a customer for PAID merchandise not received?

  • Select “Refund Receipt” as one step process to refund a customer
  • Create + sign > Customers > Refund Receipt
  • Select Customer
  • Select Payment method
  • Select “Refund From” = Bank account if refund by Check (choose Undeposited Funds account if refunded by credit card that will show up in a batch deposit process)

Refund to a customer for UNPAID (OUTSTANDING) merchandise not received?

  • Select “Credit Memo” to reverse Sales Invoice
  • Create + sign > Customers > Credit Memo

Both entries (Refund Receipt and Credit Memo) will also reverse or add back quantity sold to inventory. Inventory is overstated. It needs adjustment.

How to adjust Inventory?

From the company gear (upper right corner) > Lists > Products and Services > Choose Product that need Inventory adjustment > New Product or Service Information screen will open > Select UPDATE button > Enter “New Quantity On Hand” (it will automatically show difference as well) > Save

What will this entry do to Inventory now?

It will reduce “Inventory Asset” account (credit) and will post to Shrinkage account debit side entry. That’s your loss portion from the cost side.

Since “Shrinkage” is a default account, you can leave it as it is or reclassify to COGS or any appropriate account as needed. You will need to write a Journal Entry to do this reclass.

Categories
Customers Customers Center Receive Payment Receiving Payment

How can I refund a customer overpayment in new QuickBooks Online QBO

Customer overpaid an invoice, now showing a credit. How can I write a check that is applied against that credit?

QuickBooks Online – how can I refund a customer overpayment in new QuickBooks Online
QBO

Categories
Customer Center Customers Invoice Receive Payment

How to handle early payment discount taken to an invoice when a customer pays on time? Example: 1% 10, Net 30 or 2% 10, Net 30

In ideal accounting process, I would think handling discount taken by the customer would be part of “Receive Payment” form screen. They will have the additional line to enter discounts given to the customer as negative amount entered and thereby would match customer payment amount.

Since QBO Receive Payment screen is unable to handle this specific transaction, you will need way-around approach. No doubt, it is unnecessary and time-consuming steps to handle such a simple customer payment transaction.

You will need to create a CREDIT MEMO for early discount taken by the customer. See photo#3 for reference.

For one-time, you will also need to create new GL account for “Discounts given” (see photo 1) and new Service item for “Early Payment Discounts” (see photo 2).

Once you’ve created Credit Memo, go to Receive Payment screen, apply for payment against the open invoice as well as apply subtract early payment discounts to match customer payment. See photo#4 for reference.

See screenshot photo#5 for reference to how it will show Discounts given in P&L.

See screenshot photo#5 for reference to how it will show Discounts given in P&L.

Need better way to handle discount taken by customer, add to QuickBooks Online Feature Requests here:

http://feedback.qbo.intuit.com/


 

Photo#1

Open new GL Account
Open new GL Account

Photo#2

Create new Product Item for Early Discounts Taken
Create new Product Item for Early Discounts Taken

Photo#3

Create Credit Memo
Create Credit Memo

Photo#4

Receive Payment Screen
Receive Payment Screen

Photo#5

Profit & Loss with Discounts Given
Profit & Loss with Discounts Given

 

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Categories
Credit Memo Customer Center Customers Customers Center

Customer Refund not zeroing out account

If you have credit balance in customer’s account (A/R) and need to refund customer by payment (by check or by online), you should be using Check or Expense under Vendors header, not Refund Receipt form which works differently.

From home page screen, click “+1” sign
Select check (or expense if you paying online) under Vendors header
Select Customer from drop-down that need refund
Go to Account under Account details = Accounts Receivable (A/R)
Amount = refund amount
Save and Close
This entry will clear customer balance due account.

Note: If you have already used Refund Receipt form for this customer, need to delete that entry. That entry all it does is, takes out money from the bank account and also will reduce the income (or selected account for product/service). It does nothing with Customer account/Accounts Receivable account.

SECOND NOTE:

When to use Refund Receipt under Customers header?

If you have originally created Sales Receipt, to invoice your customer and payment received at the time of sale, and now you need to refund money to your customer that is only time use “Refund Receipt” form.

When to use Credit Memo under Customers header?

You have originally created Invoice and received payment and account has zero balance. And, you need to refund money (for whatever reason over-billing / returned item), you will need to create Credit Memo first. And, then issue refund money, using either check (or expense) form under Vendors header.