How best to categorize a transaction where a vendor took payment in error and refunded it following accounting period

I can guide you with recording your vendor refund, @desandbriddoyle-. 

If you have received a refund from a vendor, the way you record or categorize it depends on how you recorded the initial expense or transaction. Please take note of the following information: 

• If you recorded it as an expense or a cheque, you can record a bank deposit. Enter the amount and the category or account that you selected on the initial expense or cheque.
• If you received a refund on a credit card, you can enter a credit card credit. 
• If you recorded it as a bill, you can apply a supplier credit towards any open or future bill.

Here's how to record a bank deposit if you recorded it as an expense:

1. Go to the + New button and select Bank Deposit.
2. Scroll down to the Add funds to this deposit section. Enter the amount refunded by the supplier and choose the Category/Account that you selected on the initial expense or cheque.
3. If this refund was for an expense that you linked to a customer or project, tick the Track returns for customer checkbox, then select the customer or project. 
4. If you deposited customer payments for invoices into the bank account along with the supplier refund, add them in the Select the payments included in this deposit section.

You can refer to this article to explore other scenarios and get guidance on recording them: Enter supplier credits and refunds in QuickBooks Online. 

Check out this article: Common custom reports in QuickBooks Online. it'll guide you with customising your reports to get awesome insights with your expenses, supplier payments, and many more. 

Let me know if you need more help recording your transactions. I'm always here to guide you. Have a wonderful day!