Learn the different ways to apply a adjustment note, credit or refund.

Adjustment notes, credits, and refunds can be confusing.  To help, we put together this guide that outlines their differences and shows you how to apply each to transactions. 

The differences: adjustment note, credit, refund

  • A adjustment note is a posting transaction which can be applied to a customer's invoice as a payment or reduction.
  • A delayed credit is a non-posting transaction that you can include later on a customer's invoice. This transaction only affects the customer's balance once it is added to an invoice
  • A refund is a posting transaction used to reimburse a customer's money.

This means that:

  • Adjustment notes are used to offset an existing customer balance.
  • Delayed credits can be included only on an invoice.
  • Delayed credits don't affect a customer balance until they are included on a saved invoice.
  • Refunds are used to show money given back to a customer to refund for services the customer is not happy with to offset a credit balance, merchandise or service not received, or an overpayment.

Enter and apply a adjustment note

Entering a adjustment note will affect your customer's balance, but will not affect a customer's invoice until it is manually applied. Here are the steps to enter a adjustment note:

  1. Select the Plus icon (+) on the Toolbar, then select Refund Receipt or Adjustment Note.
  2. Fill out all required fields (including the customer name, date, products/service items, quantities and amounts).
  3. Select Save and close.

Here's how to apply the adjustment note to an invoice:

  1. Select the Plus icon (+) on the Toolbar, then select Receive Payment.

  2. Complete these fields as follows:
    • Customer - From the drop-down list, select the customer the adjustment note is for.
    • Date - Change if necessary.
    • Pymt Method, Ref#, Deposit to, Amount - Fields are to be left blank.
    • Memo - (Optional)
  3. Select the Adjustment Note that you are wanting to apply to the invoice
  4. Verify that the total to pay (if any) is correct after applying the Adjustment Note.
  5. Select Save and close.

Enter and apply a delayed credit

Delayed credits can be added as line items on your customer's next invoice.

  1. Select the Plus icon (+) on the Toolbar, then select Delayed Credit.
  2. Complete all the necessary fields (including the customer name, date, products/service items, quantities and amounts).
  3. Select Save and close.

Here's how to apply the delayed credit to an invoice:

  1. Select the Plus icon (+) under the Toolbar, then Invoice.

  2. Choose the appropriate customer and complete the necessary fields.
  3. Available delayed credits are listed on the right pane of your invoice (if you don't see this, select the arrow next to the invoice balance). To add a delayed credit to the invoice, select Add.
  4. Select Save and Close.

Note Keep in mind that adding a delayed credit to an existing invoice with a prior period date will change prior period balances.

Enter and apply a refund

There are four types of refunds you can choose:

Note: Refund Receipts doubles up a credit if there is already a adjustment note entered in the system, so make sure that there is no adjustment note entered yet. If there is a adjustment note, you'll need to delete and then re-create the intended refund.

Type 1: Refund for goods or services that didn't satisfy the customer.

Example: A customer already paid for an item and is returning it for a full or partial refund.

This option will provide a Refund Receipt to record reimbursements to customers via cash, cheque, or credit card. It does NOT affect the customer balance — accounts receivable, only the bank balance.

To reimburse the customer and record the return of products/services:

  1. Select the Plus icon (+) on the Toolbar, then select Refund Receipt.
  2. Select the same product/service that you are refunding, and the exact amount of the refund.
  3. After filling out all the necessary fields, select Save.

Type 2: Pay the customer their outstanding credit balance 

Example: A customer has a store credit that they would like to have paid out/redeemed for cash.

Affects the customer balance — Accounts Receivable

This option will allow you to provide your customer a refund cheque in order to offset any open credits they would like paid out.

Type 3: Refund for a prepaid order the customer hasn't received

Example: A customer prepaid an order which has been cancelled, and you need to refund the payment.

Affects the customer balance — Accounts Receivable

This option is used when a client makes a down payment or prepayment and cancels the order before receiving the goods or services and no invoice or sales receipt was created. The option will lead you directly to entering in a cheque.

Type 4: Refund the customer for paying you too much

Example: A customer over-paid on an invoice, and you need to return the excess money.

Affects the customer balance — Accounts Receivable

This option will allow you to provide a refund when a customer overpays and you want to give the customer money back (cash or a cheque) for the amount overpaid.

You may either use the Cheque or Expense features to record the refund.

If Refund Types 2, 3 or 4 were used

  • Make sure to select accounts receivable for the account on the Cheque or Expense screen.
  • Also make sure that you link the cheque or cash purchase to the open credit or unapplied payment.
  • To do this:
    1. Select the Plus icon (+) on the Toolbar, then select Receive Payment.
    2. Complete the fields as follows:
      • Customer - Select the customer the refund is for
      • Date - Change if necessary
      • Payment method, Reference no., Deposit to, and Amount received - Fields to be left blank
      • Memo - (Optional)
    3. On the left under Credits, select the plus sign (+) next to Total Credits; this will allow you to view more details about the credits.
    4. Make sure the Credit or Unapplied Payment you want the cheque or cash entry linked to is checked and ensure that the amount is correct. (check the boxes next to the refund or the customer credit) . (Note: Yo check if the credit matches the expense exactly, the receive payment will total $0.)
    5. Select Save.

If you create a adjustment note and want to issue a refund instead, or vice versa, you'll need to delete the transaction and recreate it

Here are the steps to follow if you want to delete the transaction and recreate it.

  1. Locate the adjustment note or refund.
    • From the left menu, select Sales.

    • Select Customers.

    • Choose the customer's name.
    • Under Transactions, set Show to All transactions.
    • Tap on the adjustment note or refund.
  2. Under More, select the Delete button. Once the adjustment note or refund is deleted you will want to enter in the intended refund or adjustment note.