How To Enter a Credit Card Refund in QuickBooks Online
Tim is a Certified QuickBooks Time (formerly TSheets) Pro, QuickBooks ProAdvisor, and CPA with 25 years of experience. He brings his expertise to Fit Small Business’s accounting content.
Mark has researched and reviewed accounting software at Fit Small Business since 2019 and has developed an extensive knowledge of accounting software features and how unique business needs determine the best accounting software.
This article is part of a larger series on Accounting Software.
This tutorial looks at how to enter a credit card refund in QuickBooks Online so that you can reduce your credit card balance by the vendor credit when a charge is reversed or reduced. We’ll also show you how to find the credit in the register, review the details, and make changes if needed.
Our QuickBooks Online tutorial series, which includes this course, provides comprehensive guidance on getting the most from QuickBooks Online, our overall best small business accounting software. We suggest you follow along in your own account, so if you don’t have one, choose from a 30-day free trial or 50% off for three months.
Step 1: Navigate to the Credit Card Credit Screen
From the QuickBooks Online dashboard, click on the + New button at the top of the left menu bar, and then select Credit card credit in the second column, Vendors, as shown below.
Navigate to Credit card credit
Step 2: Enter Transaction Information
The Credit card credit screen is nearly identical to the Expense screen you use to input credit card transactions manually.
Enter a credit card credit transaction in QuickBooks Online
A. Payee: Select the vendor issuing a credit to your credit card.
B. Bank/Credit account: Choose the credit card account wherein the credit is issued.
C. Payment date: Enter the date the credit was issued.
Review the original credit card charge.
It will be very helpful to do this as this credit entry should use the same categories and items for the portion of the expense refunded. The process for reviewing a credit card charge is the same as reviewing a credit card charge and credit.
D. Category details: Refer to the original credit card expense entry to determine which category should be reduced by the credit.
E. Item details: Use the same items on the original expense entry. If you’re entering credit because you are returning inventory items purchased, be sure to include the number of items returned in the QTY field so that your units of inventory owned are reduced.
When you have entered the credit information that reverses the appropriate portions of the original expense, click the green Save and close button in the bottom-right corner of the screen.
How To Review and Edit Credit Card Charges and Credits in QuickBooks Online
After a credit card credit has been entered, it should appear in the credit card register. The following steps will show you how to find the credit in the register, review the details, and make any adjustments.
Step 1: Navigate to the Credit Card Register
Hover over Accounting in the left menu bar, and then select Chart of accounts from the pop-up menu.
Go to Chart of accounts in QuickBooks Online
Step 2: Find the Credit Card Account
Scroll through the Chart of accounts to find the credit card account you want to review. In the example below, we want to review Bank of America Credit Card’s transactions. Click View register in the far right column to open the transactions for that credit card account.
View the register of a credit card account.
Step 3: Select a Credit Card Transaction
From the credit card register, find the credit card charge or credit you want to review, and then click anywhere on the transaction to open more details. We recommend making any necessary corrections to the original input screen, which you can open by clicking the Edit button under the transaction. When you are satisfied with your review or corrections, click the Save button.
Edit a credit card transaction in the credit card register
When To Enter a QuickBooks Credit Card Refund
You should enter a credit card refund as soon as you determine a purchase was damaged or unnecessary. The vendor will usually process the return using the same credit card you used to make the purchase. This refund will appear on your credit card statement as a reduction in your balance, and you need to enter it on QuickBooks so that your QuickBooks credit card balance is correct.
Don’t change or delete the original charge.
Doing this will make reconciling your credit card more difficult and will misstate your financial information if the charge and refund are in different accounting periods.
Wrap Up
You’ve just learned how to enter a credit card refund in QuickBooks Online. If you’re completing our QuickBooks Online tutorials in order, you’ve probably noticed the lessons are getting quicker as you get comfortable with the platform and how transactions are laid out. The next guide in our training course is how to reconcile credit card accounts.
