How to Handle Vendor Refunds

---

Vendor refunds are handled in two different ways depending on the timing involved.

 

If you receive a refund check after you have already printed the check and sent it to your vendor . . .

1. Create a Journal Entry. Debit cash and credit the appropriate asset or expense account for the refund amount. 

Note: If you make the adjustment directly to the vendor, you will end up with a credit balance, which is not correct.

 

If you have entered the vendor bill into the system but have not yet printed the check and are informed that the amount of the bill has been reduced . . .

1. Go to Find a Batch of Vendor Bills, find the bill in question, and change the amount owed to the new (lesser) amount before you actually print the check.