Refunds in QuickBooks will appear as a line item in the invoice as Refund Substitute. When selecting the invoice for the day, you may notice that the total value of the invoice in QuickBooks is different than the Sales Summary in Revel.
This is because refunds are handled differently in QuickBooks. The refund amount in Revel will report as a Refund Substitute line item in Quickbooks, which will add to the total value of the invoice. The difference between the Revel and QuickBooks' report is the exact return value. This Refund substitute allows us to account for both the initial payment and refund, as two separate transactions. In Quickbooks, a credit memo will then be created to decrease the value of the invoice by the refund amount.
In QuickBooks desktop, the Credit memo refund substitute transaction Debits Refunds Pending and Credits Accounts Receivable when it is a Credit card refund.
If dealing with a cash transaction, the Credit memo would Debit the cash account while crediting Accounts receivable. A Refund Check is then written from your Cash account to finish the refund.
Revel’s Sales Summary
Taxable Sales: $100
Item Discounts: $20
Net to Account For/Total Payments: $100(taxable sales) +10(tax) – 20(item discount) = $90
*Returns are not included into total payments as the taxable sales and tax has the return already reflected on it.
Taxable Sales Line Item: $100
Item Discounts Line Item: -$20
Refund Substitute Line Item: $10
Subtotal: $90 ($100 – $20 + $10)
Credit Memo separate to invoice -$10.00