Easy Tech TutsHow to Enter a Refund From a Vendor in QuickBooks, Record Refunds Easily 2026
By Impran M N
A refund from a supplier needs a two-part entry in QuickBooks Online to stay balanced: a Vendor Credit and a matching Bank Deposit. This guide walks through both steps so a returned payment lands correctly in your books without throwing off your expense history.
01Create the vendor credit
Click + New, select Vendor Credit, and choose the supplier returning the funds.
02Map the credit to the original expense
Select the same expense account that was used for the original purchase and enter the refund amount.
03Save the credit
Add a memo note explaining the refund, then click Save and Close.
04Record the bank deposit
Click + New again, select Bank Deposit, choose the checking account, and add the vendor under Received From.
05Link and verify
Select Vendor Credit or Accounts Payable in the account field, enter the matching amount, save, and confirm the entry matches your live bank feed.
Frequently asked questions
Why does a vendor refund need two separate entries?
A Vendor Credit offsets your original expense, while a Bank Deposit records the cash actually returning to your account; together they keep both sub-ledgers accurate.
What account should I use on the bank deposit?
Select Vendor Credit Card or Accounts Payable in the Account field so the deposit properly links back to the credit you created.
Will this update my vendor's balance?
Yes, pairing the credit with the deposit clears the appropriate amount from that vendor's outstanding balance.
How do I confirm the refund posted correctly?
Check your Bank Transactions feed to see that the inbound deposit matches your recorded entry.
Watch the full walkthrough
The same steps, demonstrated on screen from start to finish.
