finance

Posting a Vendor Refund in Quickbooks

This is what I did: 1) Go to Vendors -> Enter Bills. Once in pay bills click the credit radio button (next to "Bill"). Fill in the appropriate information (Vendor name, credit amount, then fill in the appropriate "expenses or items" category). Click Save & Close.

- This step places a credit (what they owe you) on your books.

2) Go to Banking -> Make Deposits. If you have pending deposits a pop up will show them, just click cancel to get to the main deposit screen. Make sure the account that you want to deposit the refund into is selected and fill in Vendor Name in Received From, the"From Account" is Accounts Payable and then the amount . Click Save & Close.

- This step records the refund in your account but has not been balanced out of your books.

3) Go to Vendors -> Pay Bills. You should see the credit show up. Click the box next to the credit you just created. Then down below in the Discount & Credit Information for Highlighted Bill section you will see Number of Credits = * and Total Credits Available * (where * is your data). Click Set Credits -> Done. You can now cancel out of the Pay Bills window.

Voila! A payment has been refunded back to your debit card account and your books are balanced.

Write off the Bad Debit

Purpose: Around yearend, or the time we need to pay our PST or GST or income tax, we need to clear invoices off the books that have not been paid for and we don't expect to be paid for.  These bad debits need to be cleared of f the books so that we don't pay PST or GST for them.

When:

  1. Around yearend
  2. Before paying our PST
  3. Before paying our GST
  4. Before paying our income tax

Process:

Part A: Write off the bad debit.

  1. Print or save a copy of the invoice to be written off.
  2. From the customer navigation, select Create Credit Memos/Refunds.
  3. In the Customer:Job drop-down list, select the name of the customer.
  4. In the detail section, on the first line, select the "Bad Debit" item.
  5. You may receive a warning message regarding item associated with an expense account....click OK.
  6. Enter the before tax amount in the "Amount" column.
  7. Enter the sales taxes in the PST and GST amount boxes.
  8. Click "save & close"

Part B: Clear the bad debit from the Accounts Receivable

  1. From ther customer navigation window, select Receive Payments.
  2. In the Received From drop-down list, select the customer name.
  3. Click the invoice you could not get payment for to highlight it.
  4. Click the "Set Credits" button.
  5. The credit memo you created in Part A should automatically be selected.  If it isn't, click the credit memo in the checkmark column to select it.
  6. Click "Done"
  7. Click "Save & Close"

Processing An Excess Payment (a tip)

Purpose: Sometimes a customer will pay an invoice and ask us to keep the change.  In order to account for this "tip" we need to do some bookkeeping.  We have a couple of options:

  1. Adjust the invoice to match the amount of the payment.
  2. Process the payment "normally" and later adjust the excess payment using a journal entry to post the excess amount as a gift.

Solution:

The first option, adjusting the invoice is obvious so I won't go into that.  The second option is the preferred option as it correctly records the excess payment.  The steps are:

  1. In the Customer navigation window, select the <Receive Payments> icon and post the full amount of the payment.  In some cases the invoice amount may be something like $56.60 and the customer gives you $60.00.  In this case post the $60.00 because this is the amount that will inevitably be deposited in the bank.
  2. Next (this can be done later, but is preferrably done ASAP), post a journal entry for the excess amount: a)  Select the <Make Journal Entry> icon on the Banking Navigation page to go to the journal entry page. b)  Set the date accordingly.  Usually the date is the same as the original payment, but in some cases such as yearend clean up, I set the date to the last yearend date. c)  The first line of the journal entry should be to the "customer invoices" account, an amount in the debit column of the excess, a note in the Memo column stating "clear excess payment", and the Name column must have the name of the customer. d)  The second line should have the account of "Gift Received", the excess amount will automatically appear in the credit column, and the memo column should have the same memo as the first line. e)  Save the journal entry.
  3. Go to the "Customer Payment" window of the payment amount that held the excess payment.  This window should now have a jounral entry line that reflects the excess amount.
  4. Highlight and make sure there is a check in the journal entry line.  The "Unused Payments" total at the bottom right of the detail window should now show 0.00.
  5. Click the <Set Credits> button and that should put you into the "Discounts and Credits" window.
  6. In the "Discounts and Credits" window you should see no details remaining in the credits detail window.
  7. Select the <Done> button.
  8. Then in the "Customer Payments" window, save.

Double Check

An easy way to find and clear the excess payments is by displaying the "A/R Aging Detail" report (go to reports/customers & receivables and select the A/R Aging Detail report).  This report shows all customers that have not got balanced accounts, they either owe us money or they are in an excess balance.  The excess balance accounts will show as negative balances.  Double-clicking on a negative balance will bring up the "Customer Payment" window.