When a supplier or employee sends you a refund for an invoice payment you have made, you can record the refund in Payables. A refund closes out an outstanding credit balance, so you are actually making a negative payment for a credit balance. The credit balance can consist of the outstanding balance of any combination of the following documents, as long as the sum is negative and equals the refund amount:
i-> Invoices
ii-> Debit memos
iii-> Credit memos
Expense report
Paying these documents with a refund records each document as paid, and gives you a complete supplier transaction history.
For example, suppose you want to stop doing business with a supplier. You have an overall $100 credit balance with the supplier. The supplier sends you a $100 refund for the credit balance, which consists of a credit memo of $250 and an unpaid invoice of $150. You enter a $100 refund (a $100 negative payment), and apply it to the invoice and credit memo. After you apply the refund, the invoice and credit memo are recorded as paid, and you have no outstanding documents for the supplier.
When you record a refund, Payables debits either your cash or cash clearing account and credits either your expense or liability account (depending on whether you use cash or accrual accounting).
You can take discounts on payables documents you pay with a refund.
Refunds for Prepayments
You may receive refunds from suppliers for prepayments you have made to them, for example, a refund for a deposit or repayment of a travel advance.
If you receive a refund for a prepayment, enter an invoice and apply the prepayment to it. Enter a debit memo for the invoice. You can then pay the debit memo with the refund.
Entering Refunds
Use the Payments window to record a refund payment for one or more outstanding Payables documents. This enables you to close an open credit balance and maintain a full transaction history for the supplier. The Payables documents you select must be in the same currency as the refund currency, and the sum of the documents you select must equal the amount of the refund.
You can identify negative supplier balances by submitting the Accounts Payable Trial Balance Report with the parameter Negative Balances Only set to Yes.
Recording Refunds for Invoices When a Credit Balance Exists
You pay debit balance with refunds in the Payments window. If you know the credit or debit memo you want to pay, you can query it in the Invoices window, choose the Scheduled Payments button, and then choose the Pay button to navigate to the Payments window.
Prerequisite
i) Set up the bank account in which you will deposit the refund. This can be the same bank account you use to make payments. Set up the appropriate cash account and, if applicable, set up a cash clearing account.
To record a refund when a credit balance exists:
1. In the Payments window, enter a negative value in the Payment Amount field. Supplier, Bank Account, and Payment Date are required fields.
Enter any other relevant information. For detailed information on any field, see Payments Window Reference.
2. Choose the Enter/Adjust Invoices button. The Select Invoices window opens.
3. Query the supplier's unpaid or partially paid invoices that are in the same payment currency as the refund currency. Select any combination of positive and negative amount invoices. For each invoice, enter the amount that you want to pay with the refund.
To see additional information about any invoice, choose the Invoice Overview button.
4. Save your work. Payables records the refund and updates the status of each selected invoice to Paid.
Recording Refunds When No Credit Balance Exists
Your supplier may send you a refund when no credit balance exists, for example, for an applied prepayment. You can record it by entering a debit memo and paying it with a refund.
Prerequisite
i) Set up the bank account in which you will deposit the refund. This can be the same bank account you use to make payments. Set up the appropriate cash account and, if applicable, set up a cash clearing account.
To record a refund when a credit balance does not exist:
1. Enter and validate a debit memo for the refund amount. Select the debit memo in the Invoices window.
Choose the Actions button. Select the Pay in Full option. Payables opens the Payments window.
2. In the Payments window, Payables provides default values for Type, Payment Amount, and Supplier. Enter Bank Account and Refund Date.
Enter any other relevant information. For detailed information on any field, see Payments Window Reference.
3. Save your work. Payables records the refund and updates the debit memo status to Paid.
Voiding Refunds
You can void a recorded refund just as you void any other payment. Select the refund in the Payments window, choose the Actions button, and use the Void option in the Payment Actions window. You can then re-enter the refund and pay any open invoices or prepayments for the supplier.
i-> Invoices
ii-> Debit memos
iii-> Credit memos
Expense report
Paying these documents with a refund records each document as paid, and gives you a complete supplier transaction history.
For example, suppose you want to stop doing business with a supplier. You have an overall $100 credit balance with the supplier. The supplier sends you a $100 refund for the credit balance, which consists of a credit memo of $250 and an unpaid invoice of $150. You enter a $100 refund (a $100 negative payment), and apply it to the invoice and credit memo. After you apply the refund, the invoice and credit memo are recorded as paid, and you have no outstanding documents for the supplier.
When you record a refund, Payables debits either your cash or cash clearing account and credits either your expense or liability account (depending on whether you use cash or accrual accounting).
You can take discounts on payables documents you pay with a refund.
Refunds for Prepayments
You may receive refunds from suppliers for prepayments you have made to them, for example, a refund for a deposit or repayment of a travel advance.
If you receive a refund for a prepayment, enter an invoice and apply the prepayment to it. Enter a debit memo for the invoice. You can then pay the debit memo with the refund.
Entering Refunds
Use the Payments window to record a refund payment for one or more outstanding Payables documents. This enables you to close an open credit balance and maintain a full transaction history for the supplier. The Payables documents you select must be in the same currency as the refund currency, and the sum of the documents you select must equal the amount of the refund.
You can identify negative supplier balances by submitting the Accounts Payable Trial Balance Report with the parameter Negative Balances Only set to Yes.
Recording Refunds for Invoices When a Credit Balance Exists
You pay debit balance with refunds in the Payments window. If you know the credit or debit memo you want to pay, you can query it in the Invoices window, choose the Scheduled Payments button, and then choose the Pay button to navigate to the Payments window.
Prerequisite
i) Set up the bank account in which you will deposit the refund. This can be the same bank account you use to make payments. Set up the appropriate cash account and, if applicable, set up a cash clearing account.
To record a refund when a credit balance exists:
1. In the Payments window, enter a negative value in the Payment Amount field. Supplier, Bank Account, and Payment Date are required fields.
Enter any other relevant information. For detailed information on any field, see Payments Window Reference.
2. Choose the Enter/Adjust Invoices button. The Select Invoices window opens.
3. Query the supplier's unpaid or partially paid invoices that are in the same payment currency as the refund currency. Select any combination of positive and negative amount invoices. For each invoice, enter the amount that you want to pay with the refund.
To see additional information about any invoice, choose the Invoice Overview button.
4. Save your work. Payables records the refund and updates the status of each selected invoice to Paid.
Recording Refunds When No Credit Balance Exists
Your supplier may send you a refund when no credit balance exists, for example, for an applied prepayment. You can record it by entering a debit memo and paying it with a refund.
Prerequisite
i) Set up the bank account in which you will deposit the refund. This can be the same bank account you use to make payments. Set up the appropriate cash account and, if applicable, set up a cash clearing account.
To record a refund when a credit balance does not exist:
1. Enter and validate a debit memo for the refund amount. Select the debit memo in the Invoices window.
Choose the Actions button. Select the Pay in Full option. Payables opens the Payments window.
2. In the Payments window, Payables provides default values for Type, Payment Amount, and Supplier. Enter Bank Account and Refund Date.
Enter any other relevant information. For detailed information on any field, see Payments Window Reference.
3. Save your work. Payables records the refund and updates the debit memo status to Paid.
Voiding Refunds
You can void a recorded refund just as you void any other payment. Select the refund in the Payments window, choose the Actions button, and use the Void option in the Payment Actions window. You can then re-enter the refund and pay any open invoices or prepayments for the supplier.
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