You can record a refund to your customer using Cheque or Expense if:
- They want to redeem their open credits.
- They made a prepayment for an order but cancelled it before receiving the goods or services.
- They want you to reimburse an accidental overpayment.
Using Cheque or Expense to record the refund reduces your bank's balance and offsets the customer's open credit, overpayment, or prepayment.
Step 1: Record the refund for your customer
- Select + New.
- Select Expense or Cheque.
- Select the customer you want to refund from the Payee ▼ dropdown.
- From the Payment account ▼ dropdown, select the bank account where you deposited the overpayment to.
Note: If you are selecting Cheque, then you will have to select Bank Account▼ dropdown. - On the first line of the Category column, select Accounts Receivable.
- Enter how much you want to refund in the Amount field.
- Fill out the other fields as you see fit, then select Save and close.
Step 2: Link the refund to the customer's credit or overpayment
- Select + New.
- Select Receive payment.
- Select the same customer you used for the cheque or expense when recording the refund.
- Fill out the other fields as you see fit.
- In the Outstanding Transaction section, select the checkbox for the Expense or Cheque you created when recording the refund.
Note: If you have automation to apply bill payments turned on, this step is done for you. - Make sure the payment is equal to the open balance, then select Save and close.