Problem: A payment related refund to a customer needed to be refunded for various business reasons, for example: incorrect payment, overpayment, reconciliation issue, or customer request.Solution: Please follow the steps below to show how to record the refund.can only be created from an unapplied customer payment (customer advance). If the original payment has already been fully allocated to invoices, no remaining customer advance exists, therefore the system does not allow creating a Bank Payment with Transaction Type = To Customer
Solution:
If the original payment can be modified (e.g. the accounting period is open)
- An Invoice has been issued to the clientcustomer.
2. The incoming payment from the customer is recorded in the system using a Bank Receipt.
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Please also refer to the description of the Bank Receipt document creation Bank Receipt (From Customer).
NOTE: If a full or partial refund is required back to the customer (partially or fully), and the system does not allow posting the bank refund with the “To Customer” transaction type because no open customer documents are available. Proceed with the workaround belowcreating a Bank Payment with Transaction Type = To Customer, the original customer payment documents must first be adjusted.
Important: Removing the invoice allocation reopens the affected invoices. After completing the refund, verify that any remaining customer payment is allocated correctly and that customer settlements are accurate.
3. Open the original Bank Receipt document in the system. Cancel posting and unlink (delete) related Invoices from this document. This creates an unapplied payment amount in the system, making it available for reclassificationrefund processing.
Mark the original payment as an advance payment for the customer. Save and post the document.
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Create a Bank Payment document with the Transaction Type = To Customer to reflect the actual refund paid out from the bank account back to the customer.
In the tabular partsection, link link the Bank Receipt document of the bank receipt to show on what basis document, the refund is paying.to indicate the basis for the refund.
Please also refer to the description of the Bank Payment document creation Bank Payment (To Customer).
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Generate report to check your actions.
Alternative method
If the original
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payment cannot be modified (e.g. the accounting period is closed)
These methods are applicable only if the same business partner is registered in the system as both a Customer and a Supplier.
- Offset a Supplier Prepayment against an Invoice Received.
- Offset a Supplier Prepayment against an existing Customer Advance of the same business partner.
Offset Supplier Prepayment against an Invoice Received.
Create a Mutual Settlements document with Transaction Type = Supplier Debt Assignment. In the Supplier and Supplier Recipient fields, select the same business partner.
On the Accounts Payable tab, select the relevant Invoice Received document.
On the Payee Attributes tab, select the related Bank Payment document created for the refund.
Please refer to the guide Mutual Settlements (Supplier Debt Assignment).
After posting the Mutual Settlements document, the supplier liability from the Invoice Received will be closed against the existing supplier prepayment. The advance payment balance and the payable amount will be fully cleared.
Offset a Supplier Prepayment against an existing Customer Advance.
Use a Mutual Settlements document with Transaction Type = Mutual Settlements to offset the supplier prepayment against the existing customer advance of the same business partner. In the Customer and Supplier fields, select the same business partner.
Please refer to Mutual Settlement (Mutual Settlement Type) for detailed instructions.
Verify that:
- customer balance is correct;
- refunded amount is reflected;
- remaining invoices are allocated correctly.
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