Sometimes, a business owes money to a customer and must pay a refund. Two basic situations may exist, requiring slightly different procedures:
In the Receipts & Payments tab, click New Payment:
A payment entry screen will appear. Complete the form as you would for any other payment. In particular, complete a line item for the refund:
Itemfield. Most of the remaining fields will fill automatically, but may be edited.
Accountshould be the same one to which the original purchase was posted. Because this is a payment, Manager will deduct the appropriate amount from an income account, add to Inventory on hand, and reduce Tax payable.
Descriptiondescribes the return/refund.
Qtyis the number of units being refunded. If an inventory item is not actually being returned, but only adjusted in price, enter zero or leave blank.
Unit priceis the amount being refunded per unit of return. If only a partial refund is being made, enter the actual amount being refunded.
Taxcode used for the original transaction.
Tracking Codeif appropriate.
Click Create when the form is complete. Remember to pay the customer.
Customer credit balances will be automatically applied to the customer’s next invoice:
But if the next invoice is unlikely to be issued soon or the customer has requested the credit be refunded, make a payment to reduce the credit balance. Most procedures are identical to refunds from cash sales as described above. However, for
Account, select Accounts receivable, then select the Customer. If the refund is associated with a specific invoice, select it in the
Invoice (optional) field. Otherwise, leave that field blank:
Click Create to save the transaction.
Refunding a credit balance only reduces the customer’s Accounts receivable balance. It does not adjust inventory or tax accounts. To do that, you must issue a credit note first.