How do I enter a refund or rebate to a customer?

Question

I need to refund some money to a customer.  He has an outstanding invoice that is smaller than the refund.  How do I process this in QuickBooks and send a cheque for the balance?

Answer

For QuickBooks QBi version (2008/09 and later)

Consider the following scenario:

Outstanding Invoice: $2,000.00

Refund to Customer: $3,000.00

Apply $2,000 to the invoice

Send a cheque to the customer for $1,000

 

To create a refund for a customer Customers > Create Adjustment Notes / Refund;

1.    Select the Customer;

2.    Select the Item – this may be the item of a previous transaction that the refund relates to, or it may be a general purpose Service item for refunds.

3.    Ensure proper details are recorded (Amount = $3,000.00) and the correct Tax Code selected;

4.    Click on Save & Close

5.    On the Available Credit screen, select Apply to a tax invoice;

6.    Select the invoice and click on Done.  The customer now has an outstanding credit;

7.    Open the Adjustment Note created in 1 above – in the bottom right corner you will see Remaining Credit $1,000.00;

8.    On the Tab line for this window, click on Use Refund to and select Give a refund and click OK;

9.    Check details on the Issue a Refund screen – select the correct bank account, select the method of payment in the Issue this refund via box.  Click OK when ready.

10. Write the cheque to the customer. 

 

 

For pre-QBi series QuickBooks (2007/08 and earlier)

 

Creating a refund or rebate:

1) From the Activities menu, select Create Credit Memos/Refunds.

2) Select the Customer:Job from the drop-down list.

3) Select the item(s) being credited. Use the information from the invoice being credited.

4) Click Print if you want to print this memo. (optional)

5) Click OK.

 

Applying a credit memo to an Invoice:

1) From the Activities menu, select Receive Payments.

2) Select the Customer:Job from the drop down list. There will be an amount in the Existing Credits field as soon as you select the Customer:Job.

3) Do NOT enter an amount in the Amount field. Leave the amount at 0.00.

4) Click the "Apply existing credits?" checkbox.

5) If Sales/Invoicing Preference is set to automatically apply payments, then QuickBooks entered the credit amount in the payment field of the oldest outstanding invoice. If Sales/Invoicing preference is not set to automatically apply payments, then click the Payment column and enter the amount of the Credit Memo next to the Invoice being credited.

 6) Click OK.

 


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