In this instructional video, Linda Artesani of Artesani Bookkeeping walks viewers through two common QuickBooks accounts‑receivable scenarios involving customer returns. First, she demonstrates how to process a one‑time refund using a Refund Receipt, selecting the appropriate bank account, printing a check or receipt, and confirming the transaction in the bank register. Second, she shows how to handle a repeat customer who prefers a credit rather than cash, using a Credit Memo, leaving it unapplied, and later applying the credit to an open invoice. Throughout, she highlights common warnings (e.g., missing account selection), explains how to match product/service descriptions, and emphasizes the importance of using QuickBooks’ built‑in transactions instead of manual check writing. The tutorial aims to demystify these processes and prevent users from making errors when returning money to customers.
Chapters
Hi there, Linda Artesani, Artesani Bookkeeping. Wanted to do a tutorial on how to handle an accounts receivable transaction where your customer buys something from you and then they return it. So I've got a couple of ways of doing that, and one will be if you've got an ongoing customer relationship and the customer returns the goods but wants a credit, and then you just give them another bill and apply the credit. And the other one is going to be where you've got a one-time customer, they bought something, they returned it, and then you are giving them a refund, you're giving them money back. So let's go to my sample file and let's go into a customer. So I'm going to pretend that Mary Summer, she purchased some widgets, $22.50, and she made a payment. And the payment here, you can see she paid the full amount, so she paid for all the widgets. And now I want to refund her the $2,250 because I'll actually refund her $2,000 of that. So she returned a lot of the widgets. So let's go back to the homepage here and come to the plus sign. And I'm actually going to refund her the money here. So I'm going to come into refund receipt because that's where you're going to send her back money. This whole transaction is going to create a check for you to print. Back to your customer and this really cool little refund receipt transaction that's going to show what you returned. So I'm going to put in Mary Summer. I know that she purchased widgets and I'm giving her back widgets, so you really want to be careful there when you put your product and service in there that it matches up. And I'm going to say $2,000 and then I can write whatever, returned, you know, 75% of order Original order, or something like that, just something that makes sense. And then I'm just going to hit Save and Close. There's your warning, something's not quite right, you must select an account for this transaction. So this is one of those warning boxes that can trip people up. So what they mean is they want to know where you're refunding it from, what account. So I'm just going to pick my Bank of America account, Save and Close. Now it says I've successfully refunded my customer $2,000. So where did it go? Well, I'm going to go to my bank account. I'll go to my register, should be the very top one. And here's my— let me switch the date range around here, it's backwards. So here is my transaction, Mary Summer, $2,000. I'm going to open it up, edit it, and then I'm going to— here's my refund receipt. So now I can come down here, print or preview, and And I can either print or preview the refund receipt, which I'll do first. So that's that nice piece of paper that you can give back to your customer that's got your logo on it. It's going to show what you're being refunded. Or I can print my check if you don't want to give them the paperwork, and you can come in here and print the check. And there it is, the check is there to refund back to your customer. So that's one scenario. So let's go back to Mary Summer here, and let's just say that she We'll go back to her account. Let's just say that she's a customer that buys from you often. You can see that that's here. And let's say she didn't— whatever happened in this order, she wants to return the $3,000 worth of goods, but she wants to, you know, she's still doing business with you, and maybe she's got a $10,000 order on hold waiting for it to be shipped, and she just said, you know what, I'm gonna have to pay you $10,000, so why don't we just do a credit, customer credit? So how do we do that? Come Come over to this plus sign. We're going to do a credit memo. Mary Summer. It's widgets again. Return of full order, you know, 1234, $3,000. So this is a credit memo. I don't want to apply it to anything because she's going to apply it to the next invoice. So I'm just going to let it stay. And then you can just send it to your customer. Obviously you can send it to her or just save and close. So the next time Mary buys something and has an invoice and she has this credit now hanging, so we can look and she's got an unapplied amount of $3,000. She actually does have some things open, so I could apply— she has some overdue items, so I could actually apply it right here to this invoice. So she's got this invoice here. I want to apply that $3,000, so I can just come over here, receive payment, and there's my credit memo, and it's going to apply that automatically. And I'm going to apply it to this open invoice here of $8,000, I want to make sure that this says $3,000 here. And then the amount received, I already received it, so it's my credit amount. So I'm going to apply it here like that. So I'm applying the $3,000, $3,000 to the $8,000 invoice, and I'm using the credit memo here to apply it to. So I'm making a zero transaction, but I'm doing that to tie those 2 pieces together. And I'll just hit Save and Close. And I'm done. And now there's nothing unapplied here. The balance on this is now $5,000. It's no longer $8,000. And there you go. We applied the credit memo. So that's just a couple of customer transactions that I think sometimes can trip people up. So it's good to have the knowledge of when to use a credit memo, when to use a refund receipt. When you're giving the money back, you can do the refund receipt. I just think that's just a couple of transactions. I think sometimes people don't even realize that it's in there and they go through writing a check and using accounts receivable, and then again, you got to link those two. So why not use those transactions that are in QuickBooks themselves? Hope that's helpful. I'll be doing more videos very shortly. I hope this clarifies some of the mystery around returning money to a customer, and I'll be back next week. Thank you. Bye now. Bye.
