Welcome to the Fit Small Business QuickBooks Online training course! In this lesson, we’re going to cover how to enter credit card refunds in QuickBooks Online.
You can follow along on your own QuickBooks Online account. If you don’t have one already, click here to sign up for a free 30-day trial and follow along below.
To complete this lesson, you can either watch the video below, read through the step-by-step instructions, or do both. Let’s begin!
Before we get started with the lesson, it’s worth mentioning that there are affordable virtual bookkeepers that can set-up and manage your QuickBooks for you. They will even help you get caught up if you are behind. For example, SmartBooks offers help with cash flow management, monthly financial statements, payroll processing and more starting at $250/month. Get a free consultation to learn more.
When to Enter a Business Credit Card Refund in QuickBooks Online
When you purchase items using your business credit card, you may need to return something because it was damaged or it just didn’t work out. The vendor will usually process the return using the same credit card that you used to make the purchase. When this credit shows up on your credit card statement, you need to be sure that it is flagged as a credit card refund and that it is coded to the same account you coded the original purchase to.
In this lesson, we will walk through step by step to show you how to correctly enter credit card refunds in QuickBooks.
How Do I Enter a Business Credit Card Refund in QuickBooks Online?
Step 1 – Navigate to the Credit Card Register
From the Home page, click on the Gear icon to the left of the company name and select Chart of Accounts, as indicated below.
From the chart of accounts list, click on the View Register link next to the credit card as indicated below.
Step 2 – Enter the Credit Card Refund
The Credit Card register will display. From the drop down, select CC Credit as indicated below.
Complete the fields as indicated below to record the return.
- Account – From the drop down, be sure that you are in the correct register. If not, select the credit card that you need to enter the credit return for. This is the credit card that the vendor credited the purchase to.
- Date – Enter the date that you returned the product.
- Ref No./Type – This field is optional. I recommend that you put CREDIT. Below the ref no. field is the transaction type. QuickBooks will put the transaction type that you selected in the above step.
- Payee – From the drop down, select the vendor that you returned the product to.
- Memo – Include any additional information about the return in this field (e.g. reason for return).
- Payment – Enter the cost of the item that was returned.
- Account – From the drop down, select the account that the credit for the return should be categorized to.
TIP: It is best practice to use the same account that you categorized the original purchase to for the credit card refund. - Save – once you have completed all of the fields, you can save this transaction.
How Do I Modify (edit) a Credit Card Refund?
If you need to edit a credit card refund that was previously entered, you can do so by following these steps:
Step 1 – Navigate to the credit card register
From the Home page, click on the Gear icon to the left of company name, and select Chart of Accounts as indicated below.
From the chart of accounts list, click on the View Register link next to the credit card as indicated below.
Step 2 – Locate the credit card refund in the register, and make changes
- From the drop down, select the credit card that you entered the refund for.
- Click anywhere within the transaction to activate the fields that you can make changes to.
- Once you have made your changes, be sure to Save them.
What Impact Do Credit Card Refunds Have on my Financial Statements?
When a credit card refund is entered, it has the following impact on your accounts and financial statements:
Account Affected | Impact on Account | Financial Statement |
|---|---|---|
Asset or Expense account | Decrease | Balance Sheet (Asset) or Profit & Loss (Expense) |
Credit Card Liability | Decrease | Balance Sheet |
Wrap Up
That wraps up the section on how to enter credit card refunds in QuickBooks Online. The next lesson in our QuickBooks Online Training Course will be How to Reconcile Business Credit Cards. In this lesson, we will explain the importance of reconciling and how to reconcile credit card transactions in QuickBooks Online.
To access this lesson or any of the others in the series, click here. Or, click here for a free 30-day trial of QuickBooks Online.
Our Recommended QuickBooks Apps
Gusto
Tsheets
Insightly
Fundbox
patti
I recently cashed in my CC rewards, so it was shown as a credit on my statement. When I entered it in CC transactions as a refund, it created a dual charge in the Charges/Cash advance as well as payments/credits in the reconciliation function. How should I enter a cash back transaction so that it only shows on one side of the ledger for reconciliation? Thanks for the tutorials!
Patti
0
0
Hi Patti, so glad you like the tutorials! This transaction should have been entered into the credit card register using the CC Credit transaction type (not refund). Since the credit reduced your total credit card balance you do have to offset that to an income account. I generally would set up a miscellaneous or other income account for this.
As far as the credit card reconciliation, it should appear on there since it will show up on your credit card statement.
Thanks for reading and watching the QuickBooks Tutorials!
Crystalynn
0
0
Hugh
Thank you, Crystalynn! I never knew that CC Credit option even existed. Very helpful.
0
0
Hi Hugh, you are very welcome! So glad you liked the video tutorial.
All the Best-
Crystalynn
0
0