How to Handle Vendor Inventory Returns in QuickBooks

Perhaps after receiving the returned inventory from your customer, you find the product was not manufactured to your specifications, and needs to be returned to the vendor. Handling these types of returns properly is important and can affect these financial balances:

• Inventory physical count and inventory valuation on the balance sheet
• Accounts payable balance on the balance sheet

To create a vendor return in your QuickBooks data file, follow these steps:

1. On the Home page, click the Enter Bills icon.
2. Select the Credit radial button at the top of the Enter Bills transaction to create a vendor credit.
3. From the Vendor drop-down list, select the vendor you are returning the product(s) to.
4. For the Date field, enter the date you want to record for the return of the inventory.
5. In the Ref. No. field, enter your vendor’s credit authorization number, if supplied.
6. Click the Items tab and select the inventory item(s) being returned.
7. In the Qty field, type the number of units being returned.
8. Review the default Cost and adjust as needed to agree with your vendor’s credit authorization.
9. Click Save & Close (or Save & New) to enter another vendor credit.

Entering a credit memo is the first step in the process. When you know to which bill your vendor applied the credit, you can assign the credit to the same bill. For more details, see the section of Laura Madeira’s QuickBooks 2013 In Depth titled: “Applying Vendor Credits,” on p. 248.