Exporting - How to manually record customer refunds - Sage Accounts v12 and below

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Modified on 11/12/2014 12:04 PM by Suzanne Coy Categorized as Accounts and Orders, Sage Accounts Software

» Exporting - How to manually record customer refunds - Sage Accounts v12 and below

Question

Occasionally, you may need to return money to your customers and to record this in your accounts. For example, the customer has returned

some faulty goods that they have already paid for, or overpaid their account.

Note: If you are using Sage 50 Accounts or Sage Instant Accounts v14, please refer to Ask Sage article 21237 . If you prefer to

automatically record the refund, please refer to Ask Sage article 11491 - How to use the Write Off, Refund and Returns Wizard.

Answer

This article contains the following sections:

How identify what transactions you need to post - This section explains the different possible scenarios and the transactions you must to

post to successfully record your refund.

To post a sales credit - This section explains how to post a sales credit.

To post a sales invoice - This section explains how to post a sales invoice

To post a bank payment - This section explains how to post a sales refund.

Note: The non-vatable tax code, T9 by default, is used when transactions are not to appear on the VAT Return. To check your non-

vatable tax code, open the Settings menu, choose Company Preferences then click the Parameters tab. The non-vatable tax code appears and,

if necessary, can be amended.

How to identify what transactions you need to post

To successfully use the table below, you should view the customer's activity and identify the transactions relating to the money being

returned.

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Transactions	Examples	Transactions to post
SI and SR	You have an invoice on the customer's account and a payment has been allocated to it, the goods are faulty, have been returned and you must now send the customer a refund. You have an invoice on the customer's account and a part payment that has been allocated to it. For example, the customer paid a deposit, was sent the goods which they have subsequently returned and they now want their deposit refunded. You have an invoice on the customer's account and a payment that has been allocated to it. Part of the shipment has been returned and you now want to refund the money.	Sales credit Sales invoice Bank payment
SA or SR	A customer has overpaid an invoice and the amount overpaid has been returned. There is an outstanding payment on account on the customer's account, for example, a deposit and the money has been returned. You have received a payment from a customer and the cheque has subsequently bounced. You have received a payment from a customer and they have now stopped the cheque.	Sales invoice Bank payment
SC	A customer has an outstanding credit on their account and rather than set the money against a future invoice it has been returned. For example, a customer has paid an invoice, a credit has been raised because the goods were faulty and the money has subsequently been returned.	Sales invoice Bank payment

Transactions

Examples

Transactions to post

SI and SR

You have an invoice on the customer's account and a payment has been allocated to it, the goods are faulty, have been returned and you must now send the customer a refund.

You have an invoice on the customer's account and a part payment that has been allocated to it. For example, the customer paid a deposit, was sent the goods which they have subsequently returned and they now want their deposit refunded.

You have an invoice on the customer's account and a payment that has been allocated to it. Part of the shipment has been returned and you now want to refund the money.

Sales credit

Sales invoice

Bank payment

SA or SR

A customer has overpaid an invoice and the amount overpaid has been returned.

There is an outstanding payment on account on the customer's account, for example, a deposit and the money has been returned.

You have received a payment from a customer and the cheque has subsequently bounced.

You have received a payment from a customer and they have now stopped the cheque.

Sales invoice

Bank payment

A customer has an outstanding credit on their account and rather than set the money against a future invoice it

has been returned. For example, a customer has paid an invoice, a credit has been raised because the goods

were faulty and the money has subsequently been returned.

Sales invoice

Bank payment

Once you have posted all of the refund transactions required, you should then allocate together any related outstanding transactions on

the customer's account. For further information about this, please refer to Ask Sage articles:

11712 - How to allocate a payment on account or credit to an invoice - Standard VAT

11754 - How to allocate a payment on account or credit to an invoice - VAT Cash Accounting

To post a sales credit

In the following example, you invoiced Bloggs Ltd for £100.00 plus VAT which is now being refunded.

Note: If you need to produce a credit note to either send to your customer, update your stock, or both, you should create and update this

from the Invoicing module and omit this section.

1) Open the Customers module then from the Links pane click Batch Credit.

The Batch Customer Credits window appears.

2) Enter the relevant details on the Batch Customer Credits window, for example:

A/C	DATE	N/C	DETAILS	NET	T/C	VAT
BLOGGS	Date	4000	Refund	100.00	T1	20.00

Note: The nominal code, tax code, net and VAT amounts should be the same as the original invoice.

3) To post the credit, click Save.

4) To close the Batch Customer Credits window and return to the Customer window, click Close.

You have now posted the sales credit to reverse the effect of the original invoice from your Nominal Ledger and if you are on the

Standard VAT scheme corrects your VAT Return.

To post a sales invoice

1) Open the Customers module then from the Links pane click Batch Invoice.

Sage Accounts v11.xx and below - Open the Customers module then click Invoice.

The Batch Customer Invoices window appears.

2) Enter the details on the Batch Customer Invoices window, for example:

A/C	DATE	REF	N/C	DETAILS	NET	T/C	VAT
BROWN	Date	Refund	9999	Refund	120.00	T9	0.00

Note: Use the date that the money is to be returned to the customer. VAT Cash Accounting - Use the same tax code, net and VAT amounts as

the original receipt.

3) To post the invoice, click Save.

4) To close the Batch Customer Invoices window and return to the Customers window click Close.

This sales invoice corrects the balance on the customer's account, posts a balance to the Mispostings Account nominal code. If you are

using the Standard VAT scheme this does not affect the VAT Return as it has a non-vatable tax code, T9 by default. If you are using the

VAT Cash Accounting scheme, sales invoices are not included on the VAT Return.

You must now post a bank payment to reduce your bank balance and clear the balance on the Mispostings Account nominal code.

To post the bank payment

1) Open the Bank module then click Payment.

The Bank Payments window appears.

2) Enter the relevant details on the Bank Payments window, for example:

Bank	If required, enter an alternative bank reference, or press F4 then from the drop-down list choose the required bank and click OK.
Date	The current program date appears by default. If required, enter a new date or select a date from the calendar, for example, the date of the refund.
Ref	Enter a reference for the transaction here, for example your cheque number.
N/C	Enter the Mispostings Account nominal code, 9999 by default.
Details	Enter the details for the transaction here, for example, the reason for the refund.
Net	Enter the net amount of the refund.
T/C	Standard VAT scheme - You should use the non-vatable tax code, T9 by default. VAT Cash Accounting - You should use the same tax code as the original receipt.
Tax	Standard VAT scheme - The VAT amount should be zero. VAT Cash Accounting - You should use the same tax amount as the original receipt.

3) To post the bank payment, click Save.

4) To close the Bank Payments window and return to the Bank Accounts window, click Close.

This bank payment reduces the balance on your bank account by the amount refunded to your customer, corrects the balance on the

Mispostings Account nominal code. If you are on the Standard VAT scheme, this does not affect the VAT Return as it has a non-vatable tax

code, T9 by default. If you are using the VAT Cash Accounting scheme, this transaction reverses the effect of the original sales receipt

on your next VAT Return.

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Exporting - How to manually record customer refunds - Sage Accounts v12 and below