How would i issue REFUND for customer product return?

Thank you for producing an excellent accounting software package , what is the correct way to process a customer refund as they have returned a product to my business and require a refund FULL PAYMENT?

Read the Guide and its subordinate pages at Manager Cloud.

Thank you TUT i will look at the guide.

There is also one more article in different section you can check:

Thank you for your updated information , i have now issued the CREDIT NOTE and then processed it through the BANK ACCOUNT tab to CUSTOMER CREDITS as directed , all is now correct and up to date.

My client offers massage - um, I’m mean Accupressure - sessions and sometimes needs to issue refunds to not 100% fully satisfied customers. In this case (as opposed to a product return) it is a loss to the business - the service was rendered, but payment, in effect, not received.
The “handling-customer-returns” procedure is indeed very simple, but we would like to be able to track these refunds. I believe they would be categorized as an expense.
Any thoughts?

You could create a Customer refund expense account. Financially, this is the equivalent of a marketing expense, something you did with the hope of generating future business. But you could also track via Credit Notes.

So customers pay in advance? If that’s the case, customer would have a customer credit under Customers tab.

If customer is not happy, I assume no invoice will be issued. In this case they should be refunded by simply categorizing payment back to customer to Customer credits account. This will clear their credit. And no sale will be made.

No sale will be made, but service has been rendered.

And just to confirm, do clients really pay in advance before service is provided?

Sometimes they do, sometimes they don’t. I’m not party to why the client gets a refund after the service has been rendered - something to do with “if you don’t fell better in 4 days I’ll refund…” maybe.

I see. If they don’t pay at all, then for accounting purposes, no transaction needs to be recorded even if service has been provided.

It they pay and then ask for refund a few days later, then just create an income (or expense) account called Refunds to customers and simply pay them back and categorize this to this refund account. This way your client can see how much they have refunded over certain period.

Don’t use Customers tab or Sales Invoices tabs at all. These are mostly for credit sales which is not what’s going on here. This is simple cash business so I would just record all these sales and refunds within Cash accounts tab (or Bank accounts tab in case bank accounts are involved too)

Would it get confusing if he used both the credit note system, and the refund account for the different purposes? I don’t see a problem, but I’m new to this system so just double checking. Basically if the patient wanted a credit, we’d issue a credit note on the original invoice. But if they said, not a good fit I want my money back, then we’d just post a refund direct to the account.
Is this right?

Thanks for the quick response! I’m meeting with my client in a couple of hours to do a run through. He made quite a mess with the books, and it has been fun learning Manager.

It’s not wrong to use Customers, Sales Invoices and Credit Notes tab even if it’s mostly cash business. It might be an overkill.

From accounting point of view, what you are proposing is fine.