Manually record customer refunds - Sage 50 Accounts and Sage Instant Account v14 and above

Modified on 26/02/2015 10:58 AM by Suzanne Coy Categorized as Accounts and Orders, Sage Accounts Software
How to manually record customer refunds - Sage 50 Accounts and Sage Instant Account v14 and above

__'''QUESTION'''__

Occasionally, you may need to return money to your customers and 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: This article only applies to Sage 50 Accounts and Sage Instant Accounts v14. If you are using an earlier version of Sage Accounts, please refer to Ask Sage Article 11468. 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 refund - This section explains how to post a sales refund. 


VAT Cash Accounting scheme - To post a manual sales refund if the receipt you are refunding is dated prior to 1 December 2008 - This section only applies if you are using the VAT Cash Accounting scheme. 

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 VAT 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.

@@@@<table width="1014" height="120" border="1" cellpadding="1" cellspacing="1">
  <tr>
    <th width="108" align="left" scope="col">Transactions</th>
    <th width="910" align="left" scope="col">Examples</th>
    <th width="114" align="left" scope="col">Transactions to post</th>
  </tr>
  <tr>
    <th align="left" scope="row">SI and SR</th>
    <td align="left"><p>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.</p>
      <p>&nbsp;</p>
      <p>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. </p>
      <p>&nbsp;</p>
    <p>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. </p></td>
    <td align="left"><p>Sales credit</p>
      <p>&nbsp;</p>
    <p>Sales Refund</p></td>
  </tr>
  <tr>
    <th align="left" scope="row">SA or SR</th>
    <td align="left"><p>A customer has overpaid an invoice, and the amount overpaid has been   returned. </p>
      <p>&nbsp;</p>
      <p>There is an outstanding payment on account on the customer's account, for   example, a deposit and the money has been returned.</p>
      <p>&nbsp;</p>
      <p>You have received a payment from a customer and the cheque has subsequently   bounced.</p>
      <p>&nbsp;</p>
    <p>You have received a payment from a customer and they have now stopped the   cheque.</p></td>
    <td align="left">Sales Refund</td>
  </tr>
  <tr>
    <th align="left" scope="row">SC</th>
    <td align="left"><p>A customer has an outstanding credit on their account and rather than set the   money against a future invoice it has been returned.</p>
    <p>&nbsp;</p>
    <p> 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. </p></td>
    <td align="left">Sales Refund</td>
  </tr>
</table>

Note: If only part of the amount is being refunded, you should process the refund transactions for the amount being refunded. 

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 £117.50, inc VAT at 17.50% 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. You must use the same nominal code, tax code, net and VAT amounts as

   the original invoice, for example: 

<table width="1014" border="1" cellspacing="1" cellpadding="1">
  <tr>
    <th align="left" scope="col">A/C</th>
    <th align="left" scope="col">Date</th>
    <th align="left" scope="col">N/C</th>
    <th align="left" scope="col">Details</th>
    <th align="left" scope="col">Net</th>
    <th align="left" scope="col">T/C</th>
    <th align="left" scope="col">VAT</th>
  </tr>
  <tr>
    <th align="left" scope="row">BLOGGS</th>
    <td align="left">Date</td>
    <td align="left">4000</td>
    <td align="left">Refund</td>
    <td align="left">100.00</td>
    <td align="left">T1</td>
    <td align="left">17.50</td>
  </tr>
</table>

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 this corrects your VAT Return.

__'''To post a sales refund '''__

Note: VAT Cash Accounting - If you are refunding a standard VAT rated sales receipt dated prior to 1 December 2008, and the refund is

dated after this date. Please refer to the section VAT Cash Accounting scheme - To post a manual sales refund if the receipt you are 

refunding is dated prior to 1 December 2008.

1) Open the Customers module then from the Tasks pane click Customer Refund. 

   The Customer Refund window appears.

2) Complete the Customer Refund window as follows:


<table width="1098" height="219" border="1" cellpadding="1" cellspacing="1">
  <tr>
    <th width="351" align="left" scope="col"><p>Bank A/C Ref</p></th>
    <th width="734" align="left" scope="col">If required, enter an alternative bank reference, or press F4 then from the   drop-down list choose the required bank and click OK.</th>
  </tr>
  <tr>
    <th align="left" scope="row"><p>Tax Code</p>
    <p>VAT Cash Accounting only</p></th>
    <td align="left"><p>You should use the same tax code as the original invoice and payment. The   default customer tax code appears by default, if required, to change this from   the drop-down list choose the required tax code.</p></td>
  </tr>
  <tr>
    <th align="left" scope="row">Date</th>
    <td align="left">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.</td>
  </tr>
  <tr>
    <th align="left" scope="row">Cheque No</th>
    <td align="left"><p>Enter up to a 12 character reference for the transaction here, for example,   the cheque number. </p>
    <p><strong>Note:</strong> If you are using the Print Cheque option you should <strong>not</strong> enter anything into the Cheque No. box</p></td>
  </tr>
  <tr>
    <th align="left" scope="row">Payee</th>
    <td align="left">Enter the customer's account reference, or press F4 then from the drop-down list   choose the required customer and click OK. </td>
  </tr>
  <tr>
    <th align="left" scope="row">Amount box</th>
    <td align="left">Enter the value of the customer refund. This should be the full cheque value, in   this example, £117.50. </td>
  </tr>
</table>

Tip: If required, to allocate a department to the transaction, click Dept, press F4 then from the drop-down list choose the required 

department and click OK.


3) To post the customer refund, click Save. 

Sage 50 Accounts Plus and Accounts Professional - To print a cheque click Print Cheque, enter the payee details then to post the customer 

refund, click Save. 

4) To close the Customer Refund window, click Close. 

You have now posted the sales refund. This records the money coming out of your bank account, corrects the balance on the customer's account and if you are using the VAT Cash Accounting scheme corrects your VAT Return. 


VAT Cash Accounting scheme - To post a manual sales refund if the receipt you are refunding is dated prior to 1 December 2008

__'''
To post the sales invoice'''__

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

   The Batch Customer Invoices window appears.


2) Enter the details on the Batch Customer Invoices window. You must use the date that the money is to be returned to the customer,

   and the same tax code, net and VAT amounts as the original receipt, for example:

<table width="1014" border="1" cellspacing="1" cellpadding="1">
  <tr>
    <th align="left" scope="col"><strong>A/C</strong></th>
    <th align="left" scope="col"><strong>Data</strong></th>
    <th align="left" scope="col"><strong>Ref</strong></th>
    <th align="left" scope="col"><strong>N/C</strong></th>
    <th align="left" scope="col"><strong>Details</strong></th>
    <th align="left" scope="col"><strong>Net</strong></th>
    <th align="left" scope="col"><strong>T/C</strong></th>
    <th align="left" scope="col"><strong>VAT</strong></th>
  </tr>
  <tr>
    <th align="left" scope="row"><strong>BROWN</strong></th>
    <td align="left"><strong>Date</strong></td>
    <td align="left"><strong>Refund</strong></td>
    <td align="left"><strong>9999</strong></td>
    <td align="left"><strong>Refund</strong></td>
    <td align="left"><strong>117.50</strong></td>
    <td align="left"><strong>T1</strong></td>
    <td align="left"><strong>17.50</strong></td>
  </tr>
</table>

3) To post the invoice, click Save.


4) To close the Batch Customer Invoices window, click Close.
 
This sales invoice corrects the balance on the customer's account and posts a balance to the Mispostings Account nominal code. 

The 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.

2) The Bank Payments window appears.


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

<table width="1042" border="1" cellspacing="1" cellpadding="1">
  <tr>
    <th width="208" align="left" scope="col">Bank</th>
    <th width="821" align="left" scope="col">If required, enter an alternative bank reference, or press F4 then from the   drop-down list choose the required bank and click OK. </th>
  </tr>
  <tr>
    <th align="left" scope="row">Date</th>
    <td align="left"><strong>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. </strong></td>
  </tr>
  <tr>
    <th align="left" scope="row">Ref</th>
    <td align="left"><strong>Enter a reference for the transaction here, for example your cheque number. </strong></td>
  </tr>
  <tr>
    <th align="left" scope="row">N/C</th>
    <td align="left"><strong>Enter the Mispostings Account nominal code, 9999 by default. </strong></td>
  </tr>
  <tr>
    <th align="left" scope="row">Details</th>
    <td align="left"><strong>Enter the details for the transaction here, for example, the reason for the   refund. </strong></td>
  </tr>
  <tr>
    <th align="left" scope="row">Net</th>
    <td align="left"><strong>Enter the net amount of the refund. </strong></td>
  </tr>
  <tr>
    <th align="left" scope="row">T/C</th>
    <td align="left"><p><strong>You should use the same tax code as the original receipt, for example T1.</strong></p></td>
  </tr>
  <tr>
    <th align="left" scope="row">Tax</th>
    <td align="left"><strong>The VAT amount defaults to the new 20% rate, for example 20.00. You must change   this to match the amount on the original receipt, for example 17.50</strong></td>
  </tr>
</table>


3) To post the bank payment, click Save.

4) To close the Bank Payments window, click Close. 

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

Mispostings Account nominal code. This transaction also reverses the effect of the original sales receipt on your next VAT Return.
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Manually record customer refunds - Sage 50 Accounts and Sage Instant Account v14 and above
