helping right brain professionals navigate the left brain world of accounting

How do I handle a refund to a debit card?

As usual, there are a few ways to do this in QuickBooks. But here’s a way that I discovered that works beautifully, especially if you’re in Canada and dealing with GST. You’re going to be entering a BILL CREDIT:

1. Go to enter bills. Select the radio button that says CREDIT.

2. Enter the vendor information as you normally would, including the date of the refund, a descriptive memo line, and the customer/job if applicable. Enter the amount of the refund (CREDIT AMOUNT) and use the ACCOUNT you originally used for the purchase. QuickBooks will automatically calculate the sales tax.

3. Now here’s the cool part! Under the expenses tab, go to a new line. In the ACCOUNT field, enter the BANK ACCOUNT where the refund will show up. Then, tab over and enter the total amount of the refund as a NEGATIVE number. Now click RECALCULATE, and the total in the CREDIT AMOUNT will change to ZERO. Click SAVE AND CLOSE.

4. The amount of the refund will now appear in the bank account reconciliation on the right side under DEPOSITS AND OTHER CREDITS.

Simple and effective!


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16 thoughts on “How do I handle a refund to a debit card?

  1. jennifer on said:

    thank you!!!

  2. Thank you so much. This is much easier than the convoluted method I was using for vendor refunds. Very nice tip!

  3. You’re welcome! Glad I could help 🙂

  4. Dovid on said:

    much better. Thanks Marnie

  5. Glad it helped!

  6. Simply Brilliant!! Thank you 🙂

  7. Michelle on said:

    Love the work around. Thank you so much! Works perfectly!

  8. You’re welcome! Glad it worked!

  9. Michelle on said:

    Doesn’t work that way in QB online for me.

  10. Hi Michelle. These instructions are for desktop, but this should work in QBO Essentials or Plus in much the same way by using a Supplier (or Vendor if you’re in the US) Credit.

    Another method is to use the Bank Deposit feature to do this as, unlike desktop, Deposits include an area to record the GST/HST. The only drawback to this method is that the activity doesn’t show up on the Supplier transaction list.

  11. Philip on said:

    Sweet tip! Thanks for posting. I also added a memo “Refund $__.__” so that I can easily identify it in reports since the transaction amount is $0.00.

  12. Glad it helped! Always a good idea to have a descriptive memo, yours works great! 🙂

  13. Marie Edenhofer on said:

    Thank you so much. This reply has saved me hours of work!

  14. So glad to hear it helped!

  15. Mathis on said:

    Thanks a lot. You saved me.

  16. Lauren A. on said:

    Love this! Was super helpful so thank you for sharing!

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