22 Nov Online Store Credits
Ask the Expert – Online Store Credits
Q – I do not know how to issue credits/returns in my QuickBooks. I know how to do it thru the on-line store manager; but now I need to reconcile my bank and merchant statements. I haven”t been doing anything with returns other than entering one reduction in order to reconcile my monthly statements. I can see where I can use the credit memo function but I don”t see it in undeposited funds or in my bank account. How do I use it to reconcile?
A – Answer submitted by Roxanne Brown, our Yahoo Store Strategic Partner.
To issue a credit in QuickBooks, create a credit memo (Customers > Credit Memo). Enter the customer name. To make reconciliation easier later, it is recommended that the credit memo number be changed to match the order number. For example, if the order was 100, the credit memo would be CM100 or 100-1. Keep in mind, however, that if you use QuickBooks for invoices, the credit memo and invoice numbers are sequential based on the last number on the most recent form that was entered. I.e. in our example, the next invoice number would be CM100-2 or 100-2 by default and will need to be overridden to restore the credit numbering sequence.
Enter the items that the customer is returning (this will return the merchandise to inventory when the credit memo form is recorded). If a restocking fee is charged, set up an item if one does not already exist as an Other Charge type of item and the account of restocking fees (an income type account).
Be sure to check the total as compared to the actual credit back to the customers account. If the amount does not match, check sales tax to ensure that it is not over or under stated.
DO NOT CLOSE THE CREDIT MEMO.
Once the credit memo is complete and the amount is correct that you want to refund, click the button at the top of the form that says “Check Refund.” This will automatically create a check, with the customer information and amount from the credit memo. You can change the bank account at the top of the form if the amount is refunded through PayPal or a different checking account. Confirm the “To be printed” box is unchecked. It is possible to simply delete any check number that appears. However, it is recommended that the check number reference the transaction. In our on-going example, it could be V100 or 100-2 if it was a VISA transaction to make it easier to match with the VISA merchant statement. At a glance it is easy to see the original sale as 100, the return as CM100 and the refund as V100.
Save and close the check. Note: The credit memo is still open and will now be visible.
The balance on the credit memo will now be zero. Save and close the credit memo.
The above procedure will increase inventory for the returned merchandise, remove the funds from the bank account (when reconciling note that there may be a deposit on the statement that is net of a deposit in QuickBooks and the check created above), and the customer reports will be complete and accurate for all activity.