There are many ways to enter a credit or refund in QuickBooks. What to do depends on the situation.

Refund a credit card payment that you received (using QuickBooks Payments)

Use when the following are true:

  • You are using Intuit's QuickBooks Payments service.
  • You need to issue a refund to a customer who paid by credit card.

Enter a credit memo for a customer

Use when the following are true:

  • You want to give a refund as credit to a customer for a future invoice.
  • You want to print or send credit memo to give to the customer, or you want to include the credit amount in your current reports and balance totals.

The credit from a credit memo is a posting transaction. That means that the amount of the credit will be reflected in report totals and the customer's balance.

Enter a credit for a customer (without giving them credit memos)

Use when the following are true:

  • You want to give a refund as credit to a customer for a future invoice.
  • You do not need to give the customer a credit memo.
  • You do not want the credit amount to be included in your current reports and balance totals.

This kind of credit is a non-posting transaction. The amount of the credit is not reflected in current report totals, nor in the customer's balance. A credit will only affect a customer's balance when they use it in an invoice.

Give a customer a refund (in cash or a cheque)

Use when you give the refund amount to a customer immediately, in cash or as a cheque.

Enter a refund that you received for one of your own (or your business's) expenses

Use when you receive a refund or a rebate (such as a credit card refund) for a purchase or expense that you recently recorded for your business.