Record a customer overpayment or Credit

You can record a refund to your customer using Check or Expense if:

• They want to redeem their open credits.
• They made a prepayment for an order but canceled it before receiving the goods or services.
• They want you to reimburse an accidental overpayment.

Using Check 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

1. Select + New.
2. Select Expense, Add expense or Check. If you're in Business view, follow the steps to switch to Accountant view first. Then come back to these steps.
3. Select the customer you want to refund from the Payee ▼ dropdown.
4. From the Payment account ▼ dropdown, select the bank account where you deposited the overpayment to.
5. On the first line of the Category column, select Accounts Receivable.
6. Enter how much you want to refund in the Amount field.
7. 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

1. Select + New.
2. Select Receive payment.
3. Select the same customer you used for the check or expense when recording the refund.
4. Fill out the other fields as you see fit.
5. Under the Outstanding Transaction section, select the checkbox for the Expense or Check you created when recording the refund.
6. Make sure the payment is equal to the open balance, then select Save and close.

Customer Refund if Invoice has been paid.

1. Select + New and select Credit memo.
2. In the Customer field, select the appropriate customer.
3. Enter the Credit Memo Date, Amount, Tax, and Product/Service (This is the category, product, or service you’re getting a credit for).
4. Select Save and close.

Note: If the customer has overpaid – you do not need the credit memo as you will already have an unapplied credit that acts as your credit memo.

1. Select + New and select Expense.
2. In the Payee field, select or enter the desired customer.
3. In the Payment account field, select the bank the money is being refunded from.
4. In the Category field, select the Debtors account (Accounts receivable).
5. In the Amount field, enter the amount of the refund.
6. In the Tax field, select the appropriate Tax (not inclusive/exclusive of tax).
7. Select Save.
8. Next, go to + New and select Receive payment.
9. Add the Customer and choose the Payment method and Deposit to.
10. Balance should be 0 as they will cancel each other out.
11. Select Save and close.
12. If you have Online Banking, go to Bookkeeping then Transactions then select Bank transactions (Take me there), or go to Banking (Take me there). Then match the record you found.

Vendor Refund if Bill Has Been Paid.

1. Select + New and select Vendor credit.
2. In the Vendor field, select the appropriate vendor.
3. Enter the Payment date, Amount, Tax​, ​and Category (This is the category, product, or service you’re getting a credit for).
4. Select Save and close.

Note: If the vendor has been overpaid – you do not need the vendor credit as you will already have an unapplied credit that acts as your vendor credit.

1. Select + New and select Bank deposit.
2. In the Add funds to this deposit section, enter the following information:
   • In the Received From field, select or enter the desired vendor.
   • In the Account field, select the Creditors account (Accounts payable).
   • In the Amount field, enter the amount of the refund.
   • In the Tax field, select the appropriate Tax (not inclusive/exclusive of tax).
   • Select Save and close.
3. Next, go to + New and select Check.
4. Add the payee and choose the Vendor Credit and the deposit (from the drawer that appears on the right-hand side) and add them both.
5. Balance should be 0 as they will cancel each other out.
6. Select Save and close.
7. If you have Online Banking, go to Bookkeeping then Transactions then select Bank transactions (Take me there), or go to Banking (Take me there). Then match the record you found.