When you give the customer their money back, you’ll need a record of receiving the customer’s refund and giving it back to them. Refund failures can be recorded in a few ways, so if you’re not sure the best way that works for your business, speak to your tax agent.
Here are two ways you can record the refund, depending on if you’ve connected your bank to the app.
If you have connected your bank
First, categorise the refund that's bounced back
The refunded money will be sent back to your account and the transaction will need to be categorised in your app.
On Home, open the Action hub tap Transactions to review.
Open the transaction for the refund.
Tap the Manual tab.
Tap Categorise and choose Undeposited funds account.
Tap Confirm match.
Next, transfer the customer their refund and categorise it
When you refund the customer, transfer the money from the connected account. That transaction will also need to be categorised as Undeposited funds account.
If you have not connected your bank
First, record the refund that’s bounced back
The refund will be sent back to your account. You will need to create a record of receiving it. Go to Money in, tap + and Record income to get started. Add the details to the record and make sure:
Customer matches who you tried to refund.
Payment category matches the account where the money was sent back to.
Income category is Undeposited funds account.
Total matches the failed refund amount.
Tax code is N-T.
Notes includes the invoice number, so you can find it again.
Next, refund the customer and record it
Return the money to the customer. You’ll need to record giving the customer their money back. Go to Money out, tap +, Record expense and tap Manually record to get started. Add the details to the expense and make sure:
Category is Undeposited funds account.
Tax code is N-T.
Payment category matches the account where the money was paid from.