Make a cash refund on credit notes, prepayments and overpayments

You can record full or part cash refunds on customer or supplier credit notes, overpayments and prepayments that have an Awaiting Payment status. You can also refund a credit note by check.

Find a credit note, prepayment or overpayment

  1. In the Accounts menu, select either Sales, or Purchases.

  2. Click Awaiting Payment.

  3. Open the transaction you wish to record a cash refund.

    • Credit notes display a CR icon:

      Credit note icon in Awaiting Payment list.

    • Prepayments display a PP icon:

      Prepayment in Awaiting Payment list.

    • Overpayments display an OP icon:

      Overpayment icon showing in Awaiting Payment list.

You can also access a credit note, prepayment or overpayment from some transaction reports or customer statements. Access prepayments or overpayments from the link in the relevant spend or receive money transaction.

Make a cash refund

  1. From the credit note, prepayment, or overpayment, scroll down to Make a cash refund and complete the fields. Tick Pay by check if applicable.

  2. Click Add Refund.

After you've entered cash refund details on an Awaiting Payment credit note, prepayment or overpayment:

  • A payment transaction creates for the refund in the bank account.
  • The status of the credit note, prepayment or overpayment will change to Paid (if fully refunded.) View the changes for the credit note in History & Notes.
Cash refund fields
  • Enter the full amount outstanding on the credit note to refund the entire amount, or part of the amount outstanding. You cannot enter any greater amount than the amount showing as outstanding.
  • The amount due takes into account any refunds already made, or credit applied to invoices or bills.
  • The Amount Paid field defaults to the total amount outstanding on the credit note which you can accept to make a full cash refund or change to the amount of the part cash refund you want to make.

The date on which you made or received the cash refund or part refund.

Paid To or Paid From
  • Choose the account from which you made the refund or into which the cash refund was received. This is usually a bank account, but if you need to pay off a credit note, overpayment or prepayment through another account, rather than cash through your bank account, you can set up other accounts to appear in this drop-down list. Do this by editing the required accounts in your chart of accounts so they're set to Enable payments to this account.
  • Amounts paid or received through your bank account (whether full or partial) will display in the list of bank account transactions for the chosen account.

Enter a payment reference if required.

  • If you receive a cash refund on a bill, you could enter the credit note number or reference on the credit note received - this will make the cash refund for this credit note easily recognizable during bank reconciliation when the incoming cash refund displays on your downloaded bank statement line.
  • If you issue multiple refunds at once and bank all checks at once or use one online payment, this is likely to come through as one large amount during bank reconciliation. You might like to enter the date you banked the checks, or a bank or online deposit reference on each of the invoices or bills covered by the payment so that during bank reconciliation you can identify which credit notes the statement line covers.
  • Then, during bank reconciliation you can identify the refund amounts included in the single imported statement line by checking the box of all those with the reference number you used for this deposit.
  • If you leave this field blank then nothing will show as the reference against this cash refund during bank reconciliation.
Pay by check

Select this checkbox if you are going to pay the refund by check.

Create a check payment for a credit note refund

View a partial refund

Credit notes, overpayments and prepayments with partial refunds (ie have an amount outstanding) are found on the Awaiting Payment tab. The amount refunded shows as Paid and remaining credit shows as Due.

Awaiting Payment tab showing amounts due or paid on each item.

Click on the credit note to see the details of cash refunds applied to it.

Partial refunds

Edit a refunded credit note, overpayment, or prepayment

You cannot edit any part of a credit note once it has been refunded (or partly refunded), except for the tracking category and account it has been assigned to. You cannot delete a credit note once it's been paid either, but you can delete the refund.

Overpayments and prepayments also have limitations in what you can edit once they've been refunded.

If you have entered a cash refund in error or need to make changes to the original transaction, delete the payment from the list of transactions in the relevant bank account (or via the Cash Refund link from the transaction in Sales or Purchases). This returns the the invoice or bill to the Awaiting Payment tab.