Customer refunds

How to record a refund paid to a customer when they returned faulty goods after they paid for them, you sent them a refund for a credit note, or you are refunding a payment made in error or an overpayment.

How it works

There are several ways to record refund

  • Refund a credit on the customer's account that has not been used to pay an invoice.

    • Match the refund to an existing credit note. Create a Customer refund from Banking or refund the credit note directly. If you want to send a remittance advice with your refund, then you must create the refund from Banking.

  • Refund payment made in error or an overpayment. Create a refund from Banking and match to the payment on account. You can also send remittance advice.

  • Refund a paid invoice. Create a stand-alone credit note, then refund the credit note directly. The credit note reverses the sale recorded on the original invoice. The refund reverses the receipt.

  • Refund a invoice paid in error where the invoice will be paid at a later date.
    • Unallocate the original invoice and customer receipt or credit note. This invoice will now be outstanding.
    • Record the refund and match to the customer receipt ( which is now a payment on account) or the credit note.

Create customer refund from banking

  1. Go to Banking and open the required bank account.
  2. Click New Entry and on the drop-down list click Purchase / Payment.
  1. Go to the Customer Refund tab and complete the following information:
*Customer * * Enter either the company name or reference. As you start to type the list of customers appears, choose the relevant customer.
Paid from Bank Account * Check the correct bank account appears. If you need to change this, choose the correct account from the drop-down list.
Method * Click the required payment method.
Date Refunded * Enter the date of the refund.
Amount Refunded * Enter the total amount of the refund.
Balance Due The total outstanding balance is displayed here.
Bank Balance The current bank balance for the selected bank account is displayed here.
Reference (optional) If required, enter a reference for this payment.
  • These details are compulsory.

By default, all outstanding credit notes and payments on account are displayed. To view all credit notes and payments on account, from the Display drop-down list, choose All.

  1. Select the check box for the credit note or payment on account that you’re refunding.

You can’t refund part of a payment on account or credit note. If you need to refund part of a transaction, you must first ensure you allocate the necessary amount of the payment on account or credit note to the relevant invoice, then refund the remaining outstanding value.

  1. Do one of the following:

To produce a remittance advice click Save and from the drop-down list click Print Remittance. The remittance advice opens in a new window and you can print or save it from your browser menu.

To add another refund without creating a remittance advice click the Save drop-down list then repeat from step 2.

To save the refund without creating a remittance advice or adding another refund click Save.

You’ve now recorded the refund and the bank and customer account balances are adjusted accordingly.

Refund a credit note directly

If you’re refunding part of the credit note, for example, because you’ve used part of it to pay an invoice, you need to allocate the relevant amount of the credit against the invoice before you record the refund for the outstanding balance, unless you’ve already done so.

  1. Click Sales then Sales Credit Notes then click the relevant credit note.
  2. Click Record Refund then check or enter the following information:
Amount Received * This is the total value of the credit note and you can’t amend this.
Paid from Bank Account * Choose the bank account used for the refund.
Method * Click the required payment method.
Date Refunded * Enter the date of the refund.
Reference (optional) If required, enter a reference.
  1. These details are compulsory.
  2. Click Save.

You’ve successfully refunded the credit note which now shows as paid.