Refund a customer

The process to issue a refund to a customer depends on whether you are refunding a credit on a customer account or refunding a paid invoice.

Scenarios where you might need to issue a refund include:

  • A customer has a negative balance as the result of overpaying an invoice

  • A customer returned goods that they received and paid for

  • A customer received a credit that was never used

If you do not plan to create another invoice for the customer, or the customer would like their money back, you can issue a refund. Issuing a refund requires coordination with Accounts Payable.

Subscription

Accounts Receivable

Accounts Payable

Regional availability

All regions
User type

Business
Permissions

To create the adjustment in Accounts Receivable:

  • Manage payments: List, View, and Add

To issue a refund in Accounts Payable:

  • Vendors: List, Add

  • Bills: List, View, Add

  • Pay bills: Run
  1. Create an adjustment (debit memo) that adjusts the customer balance to zero.

  2. Go to Accounts Receivable > All > Invoices and select Add (circle) next to Receive payments - New!.

  3. Apply the adjustment against the customer transaction.

    Unless you apply the debit memo, open transactions and the adjustment will continue to display on your aging report.

  4. In Accounts Payable, create the customer as a one-time vendor.

    Learn more about creating vendors.

  5. Refund the money owed to the customer by creating a bill.

    1. Designate the new vendor as the payee.
    2. As a line item, designate the same account used in the original credit or payment that you are refunding.
  6. Pay the bill.

If you get stuck, contact your designated support user.