For many businesses, customer refunds are a fact of life. Defective products, services that didn’t work, or just to pacify an unhappy customer, occasionally a refund will need to be processed.
As common as this situation is, it is surprising how few QuickBooks users are familiar with the process.
Refunds are created using credit memos. Customer | Create Credit Memos/Refunds.
In this example, Rock Castle Construction refunds their customer, Kristy Abercrombie, for two hours of labor that resulting from the breakdown of their air compressor.
When saving the credit memo, QuickBooks uses a popup screen to ask the following question.
Selecting “Retain as available credit”, keeps the credit memo as a credit in the customer’s balance. “Apply to invoice”, allows the QuickBooks user to apply the credit against an unpaid invoice for this customer.
In this instance, let’s say the customer had already paid the invoice and we wanted to give them an actual refund check. We would select the middle option, “Give a refund”.
Once the refund option is chosen, QuickBooks displays the above screenshot with all the information filled in. You can change it if necessary. Usually, you can select OK with the data QuickBooks has used, and the refund check is created, ready to be printed.
Hector Garcia, CPA
Certified Advanced QuickBooks ProAdvisor
12401 Orange Drive #136
Davie, FL 33330