Hello there, @TammieMB.
I'm here to help you record a customer refund in QuickBooks Online.
If you want to refund for a paid invoice, follow the steps below:
Step 1: Enter a credit memo
- Use the + New button.
- Choose a Credit memo.
- In your Customer drop-down, pick a customer's name.
- Enter any necessary details.
- Select Save and Close.
Note: If the customer has overpaid, you do not need the credit memo as you will already have an unapplied credit that acts as your credit memo.
Step 2: Make the refund
- Go to + New and select Expense.
- In the Payee field, select or enter the desired customer.
- In the Payment Account field, select the bank the money is being refunded.
- In the Category field, select the Debtors account (Accounts receivable).
- In the Amount field, enter the amount of the refund.
- In the Tax field, select the appropriate Tax (not inclusive/exclusive of tax) and hit Save.
- Next, go to + New and select Receive payment.
- Add the Customer and select the Payment method and Deposit to.
- The balance should be 0 as they will cancel each other out, then select Save and Close.
- If you have Online Banking, go to Transactions, then Bank Transactions (Take me there). Then match the record you found.
If you want to refund for goods or services for a dissatisfied customer or a customer's overpayment, you can read this article and go to the bottom part for the steps: Record a customer refund in QuickBooks Online.
I'm also adding this article to help you categorize transactions in QuickBooks Online: Categorize online bank transactions in QuickBooks Online.
Don't hesitate to comment below if you need further assistance recording a customer refund in QuickBooks Online. I'm always here to help. Have a great day.
