When a vendor issues a refund for an expense already billed to a client, follow these steps to accurately process the refund in QuickBooks and ensure it reflects correctly in LeanLaw.
Step 1: Record the Vendor Refund
When the refund appears in your bank feed:
Set the Transaction Type to Deposit.
Set the Category to a temporary income account such as Uncategorized Income
If you prefer to record the deposit manually before it appears in the bank feed:
Create a New Bank Deposit in QuickBooks.
Under Add funds to this deposit, set the following details:
Received From: The vendor issuing the refund
Account: Uncategorized Income
Description: Add a relevant description
Payment Method: Select the payment method used
Amount: The amount of the refund
Save the transaction.
This approach keeps the refund from directly affecting the client’s A/R balance.
Step 2: Process the Reimbursement to the Client
When reimbursing your client, enter a check in QuickBooks.
Payee: Your client receiving the refund
Category: Select Uncategorized Income
Amount: Enter the amount reimbursed to the client
Save the transaction.
Note: This will offset the income recorded from the refund, leaving the Uncategorized Income account balance at zero.
Step 3: Review in LeanLaw
With these steps, the net effect of the refund and reimbursement should not impact the client’s A/R balance in LeanLaw. The temporary income account ensures that these transactions cancel each other out, keeping the client’s account summary accurate.