Process a customer or supplier refund

What you need to know

You can only process a customer or supplier refund after you’ve created the credit note, overpayment or prepayment transaction that it relates to. 

You might process a refund for a customer, or receive a refund from a supplier, if there’s one of following credit transactions:

• Credit note – you’re refunding a customer for goods they’ve returned, or a supplier is refunding you for goods you’ve returned to them
• Overpayment – a customer has paid you more than you’ve invoiced them for, or you’ve paid a supplier more than they’ve invoiced you
• Prepayment – a customer has paid you, or you’ve paid a supplier, in advance for goods or services

If you’re refunding a customer or receiving a refund from a supplier related to one of the above credit transactions, you need to:

1. Record the refund on the credit transaction – this creates a refund transaction.
2. Reconcile the refund transaction to the bank statement line for the payment.

You can only refund a credit transaction when it’s in Awaiting payment status.

To record a refund on a credit transaction, you need the standard, adviser or invoice only user role. To reconcile the refund transaction to the bank statement line, you need the standard or adviser user role.

Record a refund

Enter the refund details on the credit note, overpayment or prepayment transaction. This creates a refund transaction to reconcile to the bank statement line for the refund payment.

To record the refund:

1. In the Business menu, select Invoices or Bills to Pay.
2. Select the Awaiting Payment tab.
3. Open the credit transaction to refund.
4. In the cash refund section, complete the payment fields.
5. Click Add Refund.

If you process a full refund, the status of the transaction changes to Paid. If you only partially refund the transaction, it stays as Awaiting Payment.

Reconcile a refund

Once the refund is paid from or received in your bank account, reconcile the refund transaction with the bank statement line.

To reconcile the refund:

1. In the Accounting menu, select Bank accounts.
2. On the relevant bank account, click Reconcile [number of items].
3. Next to the bank statement line for the refund payment, click Find & Match.
4. Select the checkbox next to the refund transaction.
5. Click Reconcile.