Note: Do you know the difference between a refund and a credit. A refund is immediately returning money to a customer or being given money from a vendor. A credit is where the money is saved as a "credit" that can later be applied against (or deducted from) a customer's invoice or a vendor's bill.
An expense refund is recorded by creating a negative expense. Let's take an example of receiving a partial refund of $10 on a $100 bill.
To create the refund, go the Bills to Pay page.
Find the vendor bill in the transaction history list and right-click it. This will pop up the option to Refund.
3. Clicking on Refund will create a negative bill. Next, enter the Date and adjust the Amount (if it is a partial refund). In our example, we are receiving a partial refund of $10, so we change the $-100 invoice to $-10.
4. Next, scroll down and select Show Options.
5. In the Payments section, select the date and bank account the refund was returned to.
The refund will appear on the transaction list as shown below.
A few fields to pay attention to are:
Terms or Payment Account: This is where you choose which account the refund was sent to. For example, if the vendor returned the funds to your bank account, you'd choose bank account.
Expense Account: You choose the same account that was used on the original bill.
Price: Make sure to enter in the amount as a negative since it's a refund. For example, $-10.
Sales Tax: If you were charged Sales Tax on the original bill, use that same sales tax code.