Record a cash refund for customers or suppliers

You can record full or part cash refunds on customer or supplier credit notes that have an Awaiting Payment status. This creates a bank transaction in Xero to reconcile against the statement line for the refund paid or received.

Before you start

  • Add a new credit note for your customer or supplier from within the invoice or bill.
You can also add a new credit note from the Sales or Purchases dashboard, where you'll need to include details of the transaction being refunded.

Record cash refund

  1. In the Accounts menu, select Sales or Purchases.
  2. Click Awaiting Payment.
  3. Open the credit note you want to refund.

    Image of a credit note number and credit note icon.

  4. Scroll down to Make a cash refund or Receive a cash refund and complete the payment fields.
  5. Click Add Refund.

The status of the credit note will change to Paid if fully refunded. If partially refunded, it remains as Awaiting Payment.

This refund will now be sitting in the relevant bank account in Xero as a bank transaction. You can now reconcile this against the bank statement line for the refund paid or received.