How a return affects the customer's balance, and how to refund

A customer return and a refund are two separate steps. The return brings the goods back and credits the customer. The refund pays money out. Keeping them apart means your cash box only moves when money actually changes hands.

What a return does to the money

For every return, cash or credit invoice alike:

• the customer's balance is credited with the returned amount including tax, because the customer paid tax on the sale;

• your cash box does not change;

• the sale, tax and cost of sales are reversed in the books.

After the return the customer either owes you less or, if the invoice was already paid, you owe the customer. That credit stays on the customer's account until you use it.

Review a return

1. Open Sales › Customer Returns.

2. Find the return. Search by customer or item name. The list shows Return #, Batch no, Customer, Item, Invoice ID, Quantity, Unit cost and Date.

3. In the row's Actions menu, select View, or click the row.

The Customer Return document shows the whole batch: the batch number, date, original sales invoice, who recorded it, and the customer's name and mobile. For each line you see the Unit, Qty, Net price, Subtotal, Tax and Total. Under the lines, Discount given at sale appears when the original sale was discounted, followed by Subtotal, Tax and Total due to customer (incl. tax).

Use the credit

You have two choices:

• Leave it as credit. The amount stays on the customer's balance and reduces what they owe on their next credit invoices or collections.

• Pay the customer back. Open Accounting › Payments › Customer Refund, choose the return batch by its number, enter the amount, choose cash or cheque, and post. Only now does money leave your cash box or bank. A batch can be refunded once.

Common questions

I returned a cash sale, but my cash box did not change. Is that an error? No. That is how returns work. The cash box moves when you post the refund.

The customer's statement shows a credit after a return. Why? The return credited their account. Refund it, or let it settle against future invoices.

Which number do I need for the refund? The Batch no of the return. It is shown in the list and on the document.