Vendor or insurance check refund got you puzzled? It is one of those transactions that happens infrequently and can really trip up a QBO (QuickBooks Online) user. Maybe they see it in the bank feed and wonder, “how do I code this?’ Or they receive the paper check and bring it to the bank and wonder, “how is this entered in my books?” What income account do I use?
Here are a few examples where this method will work for you:
- checkDebit Card purchase was returned
- checkDisputed bank fees are refunded
- checkInsurance audit takes place and you were overcharged for insurance for prior insurance period
Well the short answer is for these types of scenarios, it is not an income transaction at all. When your vendor refunds you, it is lowering the initial expense for your overpayment. When you make the purchase, it increases your expense total (debiting your expense). When you get the refund, you lower that total, crediting the expense.
So how do you enter this in QBO?
Very simply: Click the plus sign (+) and then bank deposit. Enter the Vendor name, the expense account you used for the purchase that is being refunded and the amount of the refund.
Below you will see a video of how to do this in the program:
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