Processing refunds to a customer

From time to time, you may need to refund a customer, perhaps because of overpaying an invoice or you have received an advance that was never used.

There are various scenarios that may arise, but this Sage Intacct Help Sheet is designed to cover the most common, if you have a specific query that does not meet the criteria documented please contact the support team.

Our consultancy team can design a more automated process for you, for more information please contact your Customer Success Manager. Details of how to process these within Intacct is covered in section 2.

1. Manually processing a refund

In this example an Invoice for £1200 was posted and a BACS receipt posted for £2400, making a £1200 overpayment.

To clear the customer’s balance to zero you will need to navigate to Accounts Receivable, All, Adjustments and post a non-vatable debit memo adjustment.

Change the date if required, select the customer and the originating Sales Invoice number, this is not mandatory, it is purely for reference.

If you have assigned Document Sequencing for adjustments the Adjustment number will say –New--, otherwise enter a reference that you can use to track the transaction.

Select suspense, or a dedicated customer refunds code if you have one. There is no VAT implication so use the code No VAT Output Tax Detail code.

The adjustment will increase the balance on the customer.

Allocate the adjustment to the overpayment by navigating to Accounts Receivable, All, Receive Payments – New! Select the Customer, enter the date(s) if not using today’s date, and then click on the Select invoices button.

Tag the adjustment if there are more invoices and transactions outstanding and click on Add & close.

In the Invoices selected for payment section enter the amount in the Credits to apply box. If there are more credits available to ensure you select the correct one click on the Credits available hyperlink.

The overpayment is available to allocate to the Adjustment. Tag this and the Credits to apply will update to the required value. Click on Save.

The adjustment will now have a credits to apply value and an outstanding amount of 0.00.

Click on Post.

The original payment will now be fully applied.

To record the refund in the bank, post a journal to credit the bank and debit suspense, or the GL account used on the adjustment.

The original adjustment postings were:

In the Entries section you can optionally select the customer dimension.