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Handling Vendor Refunds on Reimbursable Client Expenses in QuickBooks
Handling Vendor Refunds on Reimbursable Client Expenses in QuickBooks
Melissa Schaefers avatar
Written by Melissa Schaefers
Updated over a month ago

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:

  1. Set the Transaction Type to Deposit.

  2. 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:

  1. Create a New Bank Deposit in QuickBooks.

  2. 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

  3. 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

  1. 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

  2. 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.

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