Refund a customer for returned goods

When a customer returns goods, the sales return credits the customer's account: the customer now owes you less, or you owe the customer money. A return does not hand back any cash by itself. When you actually pay the customer, record the refund here against the return.

Before you start

• The return must already be recorded in Sales › Customer Returns. Note its batch number, shown in the returns list and on the return's detail page.

• For cash, your user needs a cash box, and that cash box must hold enough money. The refund is paid from your own cash box.

• For bank transfer, card or wallet, the method must be linked to an account for your branch. See Set up payment methods.

• The current year's fiscal year must be active for your branch. The refund is dated today.

Steps

1. Open Accounting › Payments › Customer Refund.

2. Enter the Return batch no. of the sales return.

3. Enter the Amount you are paying back. You can refund part of the return now and the rest later.

4. Choose the Payment method. For a cheque, enter the Cheque serial no., the Bank account the cheque is drawn on, and the Due date.

5. Optional: add a Note, for example the reason for the return.

6. Select Submit.

A message confirms the posting and shows the batch number of the journal entry.

What happens next

• The books: the customer's receivable account is debited with the refund, and the money account is credited: your cash box, the cheque's bank account, or the account linked to the method.

• The return: the refunded amount is recorded on the return's lines. Once the whole value is refunded, the return counts as paid, and a second refund of the same return is refused.

• Cheque: a cheque refund is added to the cheques register as a released cheque. See Record and track cheques.

• Statement: the return and the refund both appear on the customer statement, so the customer's balance returns to where it should be.

Common questions

Do I need a refund for every return? No. If the customer still owes you money, the return already reduced their balance. Refund only when you hand money back.

The system says there is not enough balance. Your cash box holds less than the refund. Use another method, or move money into the cash box first with a transfer between accounts.

Which batch number do I enter? The return's batch number from the customer returns list, not the number of the original sales invoice.