How to Refund Customer Payments by Check in QuickBooks Online

How to Refund Customer Payments by Check in QuickBooks Online: Video

            This video lesson, titled “How to Refund Customer Payments by Check QuickBooks Online,” shows you how to create a refund check for a customer down payment or prepayment in QuickBooks Online. This video lesson is from our complete QuickBooks Online tutorial, titled “Mastering QuickBooks Online Made Easy.”

Overview:

            If a customer makes a prepayment or down payment for a future order in QuickBooks Online and later decides to cancel the order, you can process a refund for the received payment using a check, if desired. Doing this then lets you apply the check you create to the existing customer credit to remove it. This process lets you return a payment you received that may not have involved any products or services.

            Also note that you can use the “Expense” window instead of the “Check” window to process the refund if you prefer to use that window or if the refund was cash and you don’t need to create a check. The process is almost the same using either form, assuming you select “Accounts Receivable (A/R)” or the specific accounts receivable account you used when you accepted the initial payment when creating the refund.

Create the Refund Check for the Customer Payment:

            To refund a customer prepayment or down payment by check, hover over the “+ Create” button in the Navigation Bar and then select the “Check” link under the “Vendors” heading in the menu to open the “Check” window. Select the name of the customer from the “Payee” drop-down. Select the account from which to draw the funds from the “Bank Account” drop-down. Select the payment date from the “Payment date” field. To print the check later, check the “Print later” checkbox. Otherwise, enter the check number into the “Check no” field.

            Next, in the “Category details” list, select “Accounts Receivable (A/R)” or the specific accounts receivable account you used when you accepted the initial payment, from the “Category” column. In the “Description” column, enter a description for the refund, if desired. Enter the amount to refund the customer into the “Amount” column. To print the check, if needed, click the “Print check” button in the toolbar at the bottom of the window. Alternatively, to simply save the check, click the “Save” button or select a save choice from the “Save and new/Save and close” drop-down button in the toolbar.

Manually Apply the Check to the Customer Credit:

            After creating the refund check or expense, to then manually apply it to the customer’s credit, hover over the “+ Create” button in the Navigation Bar and then select the “Receive payment” link in the menu to open the “Receive Payment” page. Select the name of the refunded customer from the “Customer” drop-down. Make sure the check or expense you just created appears and is selected in the “Outstanding Transactions” list. Make sure the existing customer credit also appears and is selected in the “Credits” list below the “Outstanding Transactions” list. Doing this applies the original unapplied payment, which is a credit, to the refund check or expense you just created. Then click or select one of the save options from the “Record” buttons in the toolbar at the bottom of the window to finish and save the payment.