Credit notes, refunds, and adjustment notes are issued to customers for damaged, returned or undelivered goods. Customers may elect to receive a refund immediately or take the refund payable as a credit on the their account (commonly used for overpayments). It depends on your regulatory requirements and your organisation’s policy and procedures regarding returns.
The video below also explains what happens when a customer overpaid a sale and how to handle that overpayment.
Create a refund
Example: The customer finds the goods delivered to be slightly damaged. So you offer and they accept a $30 credit.
- Duplicate the original sale transaction you are refunding.
- Under the Type drop-down list, Select Adjustment Note, Credit Note (or another choice appropriate for your tax zone).
- Set the transaction date as the day you had the goods returned.
- Remove any line items in this duplicated transaction that aren’t being returned.
- Change the sign to negative for all line items in the invoice but do this for the;
- Amount field if this is a Service invoice.
- Quantity field if it is an Item invoice.
- Take EITHER of these actions, depending on whether or not you are providing a cash refund:
- Apply a payment if refunding the customer immediately.
- Leave it as unpaid to leave the customer’s account in credit.
- After saving the transaction you can print or email it as required.
Example of a credits/adjustment notes:
Use a Credit against a future transaction
Example: Your customer needs to pay a $100 invoice with you but you/they know they have a $30 credit on their account so they only pay you $70
- Go to Add > Sales Payment
- In the Applied to Invoices section select the client for the Contact Pick List and click [Show] to view all outstanding payments with that contact.
- Enter the amount for the Credit/Adjustment Note still not settled in the list. Note it might have a negative sign. e.g. -$30 in the example below.
- Enter the amount for the earlier Credit/Adjustment Note you will apply against the new transaction just created in this list. e.g. $100 in the example below.
- Ensure the date, bank account and other information in this screen are correct and click [Save] to finalise the Sales Payment.
Example of a Sales Payment closing out an earlier Credit/Adjustment Note: