Create a Refund Transaction

A refund transaction is created to return funds to a customer based on a previously issued credit memo. This process typically involves generating a standalone credit memo, paying the refund, and reconciling the payment with the credit memo. Once reconciled, the credit memo’s status changes to Refunded.

Create a Credit Memo

Before processing a refund, you must create a standalone credit memo that is not linked to a specific invoice. This ensures the refund is treated as an independent transaction and accurately reflected in the customer’s balance.

1. Go to Accounts Receivable > Credit Memos.

   
2. Select Add Credit Memo.

   
3. Select a Customer.

   Do not select an invoice. This ensures the credit memo is standalone and not tied to a specific invoice.

4. Select the Credit Memo date.

   
5. Select Product/s and input the additional information such as revenue dates.

6. Click Save to finalize the credit memo.

   

The credit memo status will now be Unpaid.

Process & Match the Refund Payment

After issuing the refund payment to the customer, the next step is to reconcile it with the credit memo to complete the refund process.

1. Once the payment has been made, go to Cash Reconciliation.

2. Locate the refund payment and match it to the credit memo.

3. Click Match.

   
4. Once matched, the credit memo status will change from Unpaid to Refunded.

   

See Also

Check related articles about handling payments, credits, and reconciliations:

• Apply an Open Credit to an Invoice

• Customer Overpayment

• Add a Credit Memo

• Create a Journal Entry

• Matching and Unmatching Transactions with Rillet