Create Your Refund Invoice Template for Inventory Effortlessly

Refund invoice template for Inventory

do your customers sometimes return merchandise  to you of course everyone has customers who   sometimes return merchandise that's why you should  watch this video refunding merchandise sales in   QuickBooks if you have any questions about this  topic you can leave them in the comments section   below and I'll do my best to help you and of  course if you feel the video helped you I hope   you will click like and don't forget to subscribe  to get updates on new videos that come out all the   time refunding merchandise sales is very simple  if it's a credit sale meaning it's very simple to   record if the original sale was recorded on  an invoice the additional step is if it's a   cash snail refund and we will cover both of those  issues right here in this video refunding credit   sales invoice means the original sale was recorded  by making an invoice the refund should be recorded   by making a credit memo credit memo should have  the same items as on the original invoice from   the original sale the effect of the credit memo  is the opposite of the invoice the sales income   for that item will decrease by the sales price of  the items that are returned the cost of goods sold   will decrease by the weighted average purchase  cost of the items that were just returned and   the inventory quantity will actually increase  because if a customer gives back merchandise you   now have more merchandise available for sale in  inven Hori now here's our example let's imagine   on July 1 2019 Alan returned three bananas from  the sale made on June 3rd 2015 where we made an   invoice for that sale the sales income account  will decrease by 300 because that was the price   of the bananas returned the cost of goods sold  account will decrease by $60 because that was the   purchase cost of the bananas that Alan returned  and the inventory quantity for bananas will   increase by 3 because if a customer returns three  items there are three more available for sale so   watch how we do this in QuickBooks desktop from  the main menu click customers create credit memo now we have to choose first we should put in the  date it was July 1 of 2019 and the customer was   Alan I believe the customer was Alan yes and  the item that was returned was bananas and the   quantity of the item returned was 3 so you  can see $300 will decrease the balance of   sales income when I click Save and close you get  this question now we will check the numbers in   a moment but please note refunds from invoice  sales should be retained as a credit this way   they can be applied to the customers invoices and  balances and if you're not sure about the details   please see the accounts receivable course for  more details on how to manage customers credits   and balances but in the meantime let's make sure  these numbers happen in QuickBooks so we click   retain as an available credit and click OK now  when we open the trial balance and open the Sales   Account double click go to the very bottom the  very last transaction in the sales income account   was this credit memo decreasing the sales income  by the sales price of the three bananas that were   returned we can also double click the cost of  goods sold account and look at the very bottom   and see the very last transaction in the cost of  goods sold account is a credit memo decreasing   the cost of goods sold by the amount that we paid  for the bananas that were returned and finally if   we open the inventory valuation detail and look  at the very last transaction for bananas we see   there's an increase in quantity by 3 because  a customer just gave us 3 more bananas now in   the case of a cash sale refund you make a credit  memo the same way as if it were a credit invoice   a sale again the effect reverses the sale in the  accounts and in the inventory quantity exactly the   way we saw a moment ago you make the same credit  memo as in a credit sale from an invoice however   the additional step for a cash refund is to have  QuickBooks issue a refund this will record a write   a check transaction to decrease the cash and Bank  for the amount of the sale returned so take a look   at this example let's imagine on July 2nd of 2019  candy returned for apples from the sale made to   her on June 1 2015 we make a credit memo but when  we finished the credit memo we will instead click   issue a refund and you will notice something  interesting so let's go ahead and make the   customer enter credit create credit memo refund  and this is what's the date here the date is July   2nd of 2019 and the customer is candy and the item  that she's returning is apples and how many apples   for apples so the quantity that she's returning is  4 now we already know sales goes down by 200 now   look what happens when we click Save and close  we get this choice but this time because we're   refunding a cash sale and giving back money we  will click give a refund and then click ok now   this box comes up and what this enables us to  do is print a check that we can give to candy   for $200 and it gives us the ability to decrease  the bank account by the amount that were actually   refunding of course you would choose cash and  bank instead of undeposited funds if that's   where the money from the refund would come from  and then we click OK now I could show you the   accounts and again repeat the reverse effect that  you saw a moment ago but the interesting thing is   that the cost of goods sold actually decreased by  what the current average cost is not by what the   average cost was back on June 1 2015 so you have  to keep that in mind when you do your accounting   when I open the trial balance and double click  cost of goods sold and scroll to the bottom you   can see this last credit memo decreases the cost  of goods sold but not by 4 dollars for for apples   it decreased it by 43 74 because even though  it was refunding something from far in the past   when you create a credit memo for a refund for a  customer it will use the current average cost and   that's something to think about and consider you  should also consider that you can double click and   open the check and see exactly what QuickBooks  did if you're interested we can go here to cash   in bank double click and scroll to the very  last transaction it says credit refund and   notice if we double click oh you see this opens  up here and this is the same thing as writing a   check however you must do it this way because  if you try to write a check yourself instead   of doing it the way I just showed you cannot  directly write this check yourself because you   cannot put a negative quantity of merchandise  in the bottom of a check so it's very easy to   do but there's a lot to consider when you give  a cash refund for a cash sale of merchandise you