Problem:  A customer refund is required, but the system does not allow creating a Bank Payment with Transaction Type = To Customer because no open customer documents are available. As a workaround, the refund was recorded using Bank Payment with Transaction Type = To Supplier, although the payment is related to a customer refund and not a supplier transaction.

Solution: The recommended approach is to adjust the original customer payment documents and process the refund through the customer transaction flow.

Please follow the steps below to record the refund.

1. An Invoice has been issued to the client.

     2. The incoming payment from the customer is recorded in the system using a Bank Receipt.

The payment amount is fully allocated to open invoices.

Please also refer to the description of the Bank Receipt document creation Bank Receipt (From Customer).

NOTE: If a 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 below.

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 reclassification.

Mark the original payment as an advance payment for the customer. Save and post the document.

    4. Create Bank Payment to record refund.

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 part, link the document of the bank receipt to show on what basis document, the refund is paying.

Please also refer to the description of the Bank Payment document creation Bank Payment (To Customer).

Generate report to check your actions.

Alternative method 

Offset Supplier Prepayment against Supplier Invoiceн

If the original documents belong to a closed accounting period and the user does not want to make changes to the closed period, the refund can be processed using Bank Payment with Transaction Type = To Supplier.

This creates a supplier prepayment balance for the same business partner. If the business partner later acts as a supplier, the prepayment can be offset against an Invoice Received by using the Mutual Settlements document.

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.

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.

Thank you for being a FirstBIT customer!   

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