How to register a Refund

MikeLEMikeLE Member Posts: 1

I would like to cancel an invoice and create a refund, but not sure how to do that.
This is how I created the invoice:

  • Estimate Created
  • Estimated Converted to Invoice
  • Customer paid by Wire Transfer
  • Recorded a payment

Now need to refund $19,700 out of $19,900; (payment was not processed by Wave)
Please explain steps, how should I properly cancel an invoice and register a refund. I'm not an Accounting Pro.

Thanks,
Mike

Comments

  • TucksedeauxsTucksedeauxs Member Posts: 1

    I have the same issue. The best advice I found for those of us not using Wave Payments (though slightly convoluted) is this:
    1. Create a duplicate negative invoice for the customer and amount refunded (-19,700, make sure to assign the original income account for the item/service).
    2. From the invoice, record a negative payment (which will be the refund transaction you made).
    3. If you have already made the refund, go back to the transactions page and delete that (now duplicate) transaction (NOT the one marked Invoice Payment), or do so immediately after making the actual refund.
    [Note: You can't assign an outlay as an invoice payment from the transactions page.]

    Good luck.

    edited January 4, 2019
  • RahimRahim Member Posts: 97 admin

    Hi @MikeLE and @Tucksedeauxs

    On the upgraded Accounting platform you can do the following:

    1. Go to Accounting > Transactions
    2. Add Expense
    3. Add a description (Refund for Invoice X)
    4. Choose the same account where the payment was deposited into
    5. Enter the refund amount under “Total Amount”
    6. Under category type refund and choose the “Refund sent for an invoice in Wave”
    7. Type or scroll to find the invoice and select it.
    8. Add the refund reason in the notes for your reference and save the transaction.
    9. The invoice will now have the refund applied and will show as unpaid/overdue when you view it. In invoicing you can edit the new negative payment applied and change the method in which you gave the refund.

    There are improvements I'm going to look at with my team to surface this within invoicing as well.

    Thanks,

    Rahim

  • TPATPA Member Posts: 7

    @Rahim, that method works well. What do you do once, you've processed the refund and the invoice shows an amount due? ie because it was never paid by the client in full eg cancellation

    edited January 25, 2019
  • RahimRahim Member Posts: 97 admin

    Hi @TPA

    That will depend largely on the nature of the refund.

    If you intend to recollect, you can send reminders and recollect the payment.

    You can add an adjustment to the invoice if it's a change to the invoice (incomplete work, or something unavailable that you needed to refund)

    Or you can write off the amount if it's considered bad debt. We have an article that outlines how to do this: https://support.waveapps.com/hc/en-us/articles/115000031243-Dealing-with-bad-debt-How-to-write-off-an-invoice

    There may be other outcomes as well but the above are common flows people use.

    Thanks,

    Rahim

  • JusmihJusmih Member Posts: 3

    @Rahim said:
    Hi @MikeLE and @Tucksedeauxs

    On the upgraded Accounting platform you can do the following:

    1. Go to Accounting > Transactions
    2. Add Expense
    3. Add a description (Refund for Invoice X)
    4. Choose the same account where the payment was deposited into
    5. Enter the refund amount under “Total Amount”
    6. Under category type refund and choose the “Refund sent for an invoice in Wave”
    7. Type or scroll to find the invoice and select it.
    8. Add the refund reason in the notes for your reference and save the transaction.
    9. The invoice will now have the refund applied and will show as unpaid/overdue when you view it. In invoicing you can edit the new negative payment applied and change the method in which you gave the refund.

    There are improvements I'm going to look at with my team to surface this within invoicing as well.

    Thanks,

    Rahim

    If you do it this way Rahim, it leaves an outstanding balance of the original amount outstanding, it also appears back in your dashboard saying there is amount overdue on the invoice? how do you fix that? @Rahim

    edited January 26, 2019
  • TPATPA Member Posts: 7

    @Jusmih thats exactly the problem I have. Refund processed and now the invoice is outstanding.

  • TPATPA Member Posts: 7

    @Charlotte Hi, is there anyone on the team that can give a complete answer to the above question? Thank you

  • RahimRahim Member Posts: 97 admin

    @TPA I had posted a link in an earlier response around what you do with that outstanding amount. Once a refund is processed, the invoice goes back to an unpaid state. If you are going to collect again, you can do so, and if not, you can choose to write off that income or modify the invoice with a note to say that this was changed for reason x.

    I am currently doing research on different states we may want to add to invoices so I will take this feedback for a "refunded" state.

    Thanks,

    Rahim

  • AndyKAndyK Member Posts: 18

    Let's see if I've got this right.

    I've just issued a refund for a customer who had paid for a service and was unable to proceed. I categorised the bank payment, the refund, as Refund for Invoice which then as noted adds a negative payment on the invoice but also makes invoice outstanding for the full amount again.

    I considered simply editing the invoice to add an item with a negative amount to cover the refund but opted to use the Bad Debt procedure, which I have used previously for unpaid invoices.

    This works but just seems a bit messy due to the extra steps and I now have three payments shown against the invoice, the original one, the refund, and the bad debt payment to Undeposited Funds. In my Transactions view I now have 4 transactions, the original payment, the refund to invoice, the Undeposited Funds payment and the Bad Debt expense.

    Assuming I've done this right, I'm hoping this can be simplified to a couple of steps, categorising the expense as Refund sent for an invoice in Wave and changing the invoice state to Refunded, or something along those lines anyway. It would streamline things and be a big help.

    Thanks
    Andy

  • SamdSamd Administrator Posts: 560 admin

    Hey @AndyK - it does sound like you've done everything right in this case, and the bad debt method is likely the most sound for writing off the invoice. We are looking to improve and streamlining our invoicing feature, so your feedback is much appreciated. In terms of making the bad debt/write off feature a little more accessible, what would an ideal workflow be for you? Would having a 'Write off' function in the invoice menu, where you could input a reason and have Wave automate the process behind the scenes be useful? Any feedback or insights into what would work best for your business is more than welcome.

  • NEXASportNEXASport Member Posts: 1

    Hi @Rahim ,
    does the method you have detailed process the payment refund to the clients bank account, or is it just recording the details of the refund. I am trying to work out how to issues the refund payment.
    Thanks, Daniel

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