It doesn’t happen very often, but sometimes you get money back from a vendor. How do you record the refund in Sage 50/Peachtree? It’s not hard but you’re probably so used to ignoring the option that you don’t even realize it’s there. And you don’t have to resort to using a general journal entry or setting the vendor up as a customer. Let’s look at a couple of scenarios.
In most cases this will be a two step process. In step 1. open the Receive Money window (Tasks menu > Receive Money). There’s a drop down list to the left of where you normally enter a customer ID. That is what most people overlook. Open that list and change it to Vendor ID. Now you can select a vendor ID instead of a customer ID. Complete everything else in the upper half of the screen just as you would for a payment from a customer. In the bottom half of the screen, the Apply to Vendor Account tab will already be selected. You can enter a description if needed. The GL Account will automatically be set to the accounts payable account; Do NOT change it. If you set the GL account to anything other than Accounts Payable your aged payables report will no longer match the accounts payable balance on your general ledger. Enter the amount and click Save.
If you got a refund from a vendor, normally it would because you had an outstanding credit with them. So step 2 is to apply the refund to the credit. You’ll do this in the Payments window (Tasks menu > Payments). Enter the vendor ID, a dummy check number (you could use the refund check number if it isn’t similar your own check numbers) and the date. On the Apply To Invoices tab, the receipt you just entered will show up as if it was an invoice. Check the Pay box on its line and check the Pay box for the related credit memo. If there is no credit memo, you can either stop and enter one (Tasks menu > Vendor Credit Memos) or select the Apply To Expenses tab and enter a negative amount to offset the amount of the refund. The GL Account should be the relevant expense account. If merchandise was returned use the Item ID with a negative quantity so that inventory will be corrected. When you’re done, the total payment amount (in the top half of the window) should be $0.
There’s another method that only requires one step.but it has a drawback that I’ll explain at the end.
Once again you’ll start in the Receive Money window (Tasks menu > Receive Money). Skip over the Customer ID/Vendor ID entirely and simply type the name of the vendor/payer into the Name field. Complete the rest of the top half of the screen like you normally would. On the Apply To Revenues tab, enter a description, GL account, and amount. Click Save and you’re done.
The second method is fast and simple but only appropriate for what I would describe as a miscellaneous receipt, and here’s why. Since you don’t enter a vendor ID, this transaction won’t be linked to a vendor or show up on any vendor reports. That makes it harder to find later. It also means you can’t apply it against an open credit memo. Save this method for oddball items that you might be tempted to record as a general journal entry. At least this way they’ll show up on the cash receipts journal and can be grouped into the rest of the deposit.
