How to Log a Client Refund in QuickBooks
It’s important to make sure that your QuickBooks data is accurate. Not only does this include making sure transactions are free of errors but it also includes making sure that the status of payments and how money moves around in QuickBooks matches reality. One situation many business owners don’t track appropriately in QuickBooks is refunds. It’s important to track refunds in QuickBooks.
In today’s episode Bernard Roesch, explains why it’s important and how to track refunds in QuickBooks.
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Why Track Refunds in QuickBooks?
It’s important to make sure the data for individual clients is accurate within QuickBooks. If you owe a client money as part of a refund, it’s important to have a good audit trail of that money within QuickBooks. You may need to send statements to clients or other people involved in your business, so having this data accurate and logged in QuickBooks is important.
The Flow of Refunds in QuickBooks
The steps to appropriately log refunds in QuickBooks are as follows. First, you’ve probably already invoiced the client and they’ve paid you for that invoice. Do not simply reverse the transaction or write the client a check. To properly log a refund enter a credit memo for the amount that you’re going to be refunding them. This credit memo is basically a reverse of the invoice transaction. Then you can use that credit to write a check to the client. If there was no invoice and you were just paid for services, write the client a check and book it to the same line item that you used when you received the money in the first place. By tracking all of this information in QuickBooks, you can easily look back at a later time and even produce reports on the status of client, financials, and refunds.
Need Help Leveraging QuickBooks?
If you need help leveraging QuickBooks to have a better handle on your business finances, contact Bernard today. Not only can he help you ensure transactions like refunds are logged appropriately but he can help you make QuickBooks a powerful tool and data resource for your business.