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How to enter check received from a vendor(refund) in GP

I recently had written a post about the entering refund for customers. Today I am going to discuss various scenarios about entering refund from vendor in Microsoft Dynamics GP

  1. Refund from a vendor with credit balance(over payment)
  2. Refund from vendor with no existing balance for the vendor in the GP

 

Case 1: There is credit balance probably from an overpayment or credit memo for the vendor. It means vendor owes you and you want to clear it by entering payment you received from vendor

  1. Open the Payables Transaction Entry window (Transactions >> Purchasing >> Transaction Entry), select Misc. Charge in Document Type  and enter the details
  2. In the distribution, debit a suspense GL account and credit the normal Accounts Payables account. Post it
  3. Apply the Misc. Charge on the credit balance (over payment) to clear the vendor balance
  4. To record the receipt in bank account, open the Bank Transaction Entry window (Transactions >> Financial >> Bank Transactions) and select “Enter Receipt” option.
  5. Enter the checkbook and payment details. This will a debit the Cash account and use the GL suspense account same from Misc Charge on credit side.
  6. This will create a check waiting to be deposited.  Open the Bank Deposit Entry window (Transactions >> Financial >> Bank Deposits).
  7. Select the checkbook, mark the check for deposit and post it.

Case 2: If you don’t have a credit for the vendor account, you can simply enter a Return Transaction in Payables.

  1. Open the Payables Transaction Entry window (Transactions >> Purchasing >> Transaction Entry), select Return in Document Type  and enter the details
  2. Enter the payment (check) details in bottom right hand corner of the transaction window
  3. Post the debit memo
  4. This will create a check waiting to be deposited.  Open the Bank Deposit Entry window (Transactions >> Financial >> Bank Deposits).
  5. Select the checkbook, mark the check for deposit and post it.

You  can also refer to following post by Victoria Yudin about  Payables Return transactions in Dynamics GP for details

 

 

19 Responses to “How to enter check received from a vendor(refund) in GP”

  1. [...] How to enter check received from a vendor(refund) in GP (Rubal) – After writing about entering refund for customers, Rubal is back with discussing various options regarding entering refunds from Vendors. [...]

  2. Rizwan says:

    Thanks

  3. Clara says:

    Hi Rubal,

    Thank you for posting this topic…definitely very helpful!

    What if the refunded check from the vendor was recorded as an IAJ and already reconciled?

    How can I apply the refund to an open and partially applied Credit Memo from the vendor(Case 1 above)?

    Again, thank you (in advance).

  4. Janett says:

    Rubal – Thank you for both posts payment to customer and payment from vendor. Both were most helpful. Any recommendation on reconciling the subledgers to the general ledger in Cash, AR, AP, and Sales?

  5. Anonymous says:

    Thank you, it worked perfectly.

  6. maribell says:

    Thank you, this was very helpful!

  7. Denni Conner says:

    For Case #1, I think I’d prefer creating an AP return transaction to have the check associated with the vendor ID and then create a debit memo to apply against the credit memo or overpayment to clear the vendor account. A suspense account could be used between the return and debit memo. That way the check deposit methodology is consistent. Do you see any holes in this method?

    Thanks!

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