Refund From a Vendor


We have a debit memo from one of our vendors and they are going to send us a refund check - how do I process the check in AP?

Pete Gentile

  • 0

    How to process a vendor refund check


    To record refund in AR:

    1. In Accounts Receivable, Activities, Process Cash Receipts open Cash Receipts batch or create new one.
    2. Click Enter Cash Receipts, select Misc Cash from Payment drop down, complete the form and save. 
    3. Post the batch

    Recording the refund in AP is optional but recommended as it provides an audit trail of the refund

    To record receipt of refund in AP:

    1. If a related Debit Memo does not already exist for the vendor, create one in Accounts Payable, Activities, Process Vouchers.  Click Enter Vouchers.  Select Type of Debit Memo and complete the form.  Comment can be included to provide more details related to return or reason for Debit Memo. 
    2. You will also need to create a Credit Memo that will be applied to the Debit Memo.  Comments can be entered on the Credit Memo with information as to the refund check issued by vendor.  Save and post the batch   
    3. Open Apply Payments and Memos, create a new batch, click Apply Payments.  in Apply Payments drop down, select Memos.  Enter/select the vendor.  Click on Document No lookup and select the debit memo.   You can then either search for the credit memo from Invoice field or enable option to Show Open Vouchers and select the credit memo from the grid.  Save and post the batch. 

    Hope this article helps.

    Thank you,


  • 0

    Alternatively, you could also enable AP integration, establish a vendor-customer relationship in Maintain Customers, create the memo in AP, receipt in AR, then balance the accounts using process settlements which is typically the easiest method once it is configured.

    The processes Tony detailed maintain the audit trail to allow for proper bank account reconciliation in the system. There are other methods to do all this in a manual fashion as well, working within AP and CM, so it just depends on how you typically balance your subledgers.