Donations, Groupon and refunds in QuickBooks

  • Added:
    Nov 20, 2012
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    1992
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While our QuickBooks accountants were answering QuickBooks related questions on Yahoo Answers asked by small business accountants, they came across a few interesting ones regarding how to book income coming from Groupon and donations (the last for a nonprofit organization) or giving customers a refund. We thought to put the answers and questions together in case you find yourselves needing to book similar transactions in your QB accounting business software.

Q1: Customer refund in QuickBooks?
I make a customer receipt for every payment the customer makes. At the end of the day, I go to "record deposits" tab and check every payment; this will make my deposit amount. Sometimes I have to give a cash refund to the customer for the service they have already used and those money was already deposited before. When I make a refund in QuickBooks it does not reduce my deposit amount in the deposit screen. How do I reduce the amount of money in the "record deposit screen"?

A: If you use the "Use Credit To" functionality of a credit memo, it will only allow you to record the refund directly against your bank account, instead of grouping it with other Undeposited Funds. The simplest method to do this would be to create a Journal Entry instead of using the Credit Memo/Refund transaction. You would debit the Income account and credit Undeposited Funds for the amount of the refund. This will then show in the Payments to deposit window as a negative amount. Keep in mind that QuickBooks will not let you make a negative 'deposit', however, so you will need to have more to deposit than refund for the day.

Q2: How do you book income Groupon in QuickBooks?
I am a bookkeeper and I have a new client that is using Groupon to promote his business.
Two Questions:
1) I want to book the income as Unearned Revenue and as service is used book that amount as sales. Is that the correct way anyone else is handling Groupon Revenue?
2) What if the Groupon is not redeemed, the amount I assume stays in Unearned Revenue, but what if they customer never shows or uses the Groupon?

A: I would recommend treating the Groupon similar to a gift certificate. You can create another charge item and link it to a liability account. If the customer never redeems the Groupon, then you would move the amount from the liability to income. Keep in mind that you would have to reverse this transaction if the customer ever did show up.

Q3: Can you use Intuit QuickBook as a donation method?
I work at a non-profit charter school. We use QuickBooks for employee paychecks and use QuickBooks for an after school program for requesting payment. The payment is through QuickBooks. The parents get an invoice and they pay that payment through a billpay.quickbooks.com link.
We want to set up a similar method for people want to do donations. Can we do this? So instead of payments, it would be a donation account? A separate account where this money goes?

A: QuickBooks can track donations to a separate account, but you would first have to create an invoice for the amount in order for it to show up on billpay.quickbooks.com.
There is a preference you can turn on that will let you select which account a payment is going to be going to (by default, it's Undeposited Funds). You can specify a separate bank account for any donation payments received.

Author's Profile

I represent the Presti & Naegele top accounting firm based in New York. Apart from QuickBooks assistance, we provide accounting and tax services to small business accountants. In addition to our accounting for payroll assistance and tax preparation services for companies, we also offer income tax services for individuals as well.


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