Record a refund from a vendor

If a vendor provides you with a refund because you returned faulty goods after you paid for them or they sent you a refund for a credit note, record the refund amount to ensure your account balances are correct.

You can post a refund against a stand-alone credit note or a payment on account. If you need to refund a credit note or payment which has been allocated to an invoice, you have two options:

• Create a stand-alone credit note and then refund it. The credit note reverses the purchase recorded by the original invoice and the refund reverses the payment.
• Unallocate the original invoice and vendor payment or credit note so that the invoice is outstanding and the payment becomes a payment on account, or the credit note a stand-alone credit note. You can then record a refund against the credit note or payment on account. You should only choose this option if you intend to make another payment to the vendor for the same invoice at a later date.

To post a vendor refund from Banking

You can also go to Banking and create a refund from the New Entry menu. If you choose to enter the refund from here, you must select the correct bank account when entering the payment details.

1. Go to Banking.
2. Select the required bank account.
3. Click New Entry, and then click Sale/Receipt to open the Receipt (Incoming money) page.
4. Click the Vendor Refund tab and complete the necessary information. By default, all outstanding credit notes and payments on account appear. To view all credit notes and payments on account, from the Display drop-down menu, choose All.

Vendor	Enter either the company name or reference. As you start to type the list of vendors appears, choose the relevant vendor.
Paid into Bank Account	Select a bank account from the drop-down list.
Method *	Specify the payment method.
Date Refunded *	Enter the date of the refund.
Amount Refunded *	Enter the total amount of the refund.
Your Reference (Optional)	If required, enter a reference for this receipt.
Amount Refunded	Enter the amount of the refund.

5. Select the check box for the credit note or payment on account that the vendor has refunded.
6. Do one of the following:
   • Click Save.
   • Open the Save drop-down menu and click Add Another to add another payment.

You've now recorded the refund and the bank and vendor balances are adjusted accordingly.

To post a vendor refund from within a credit note

If the vendor has refunded part of the credit note because, for example, they've used part of it to pay an invoice, you need to allocate the relevant amount of the credit against the invoice before you record the refund for the outstanding balance.

1. From Expenses, click Vendor Credit Notes.
2. Click the relevant credit note.
3. Click Record Refund and enter the following information:

Amount Refunded *	This is the total value of the credit note and you can't change this.
Date Refunded *	Enter the date of the refund.
Paid into *	Choose the bank account used for the refund.
Method *	Specify the payment method.
Reference (optional)	If required, enter a reference.

4. Click Save.

   * Indicates a required field.

You've successfully refunded the credit note which now shows as paid.