How to handle a refund for a order from a supplier, if you don’t need to send the products back?
So products must stay in inventory.
If the supplier has refunded you cash, then you can simply go to Bank accounts or Cash accounts tab to receive money. Allocate the amount to Inventory on hand account, then select inventory item for which you have received the refund.
Since you don’t want the inventory to be affected (you didn’t send back any goods), enter 0 into Qty column. This way your inventory on hand value will be decreased without affecting inventory count.
Okay thank you.
How do we receive money against an inventory item now there is no Inventory on hand account to choose from?
I have just allocated the refund to a sundry income account for now but would like to reduce the item cost price instead.
You can either record debit note which would take items from inventory on hand. Or you can create negative Spend money transaction which would also take items from inventory on hand.
Since quantities are negative, total amount will be negative so it’s basically negative payment = received money.
Not sure whether this is the way to go to record cash refunds for inventory items but it works.
If there is no inventory on hand for the inventory item in which you are receiving the money, then a sundry income account is your only choice now that Inventory Items are selected first before Account in Receive or Spend Money.
From that posting there are two possible choices if you don’t want to leave it as Income…
(1) If the Inventory Item will have inventory on hand again, then after that inventory on hand arrives do a Journal : Debit Sundry Income and Credit Inventory on Hand - Inventory Item. Special note - make sure the qty is entered as zero, otherwise the qty will adjusted by one.
(2) If the inventory item wont become inventory on hand again, then you can do a Journal : Debit Sundry Income and Credit Inventory on Hand - Inventory Item, and by entering a zero qty the amount will be transferred to Inventory - Cost as a negative value.
Thanks @lubos & @Brucanna
Basicly, my supplier is holding a promotion at the moment, if i purchase x2 items at £100 each i get invoiced £200 and i pay the £200. A few days after, i receive £20 back in the business account from that supplier (£10 for each item). The 2 items are still in stock.
I am trying not to use the Journel tab if i can get away with it as i haven’t enabled that tab yet!
@lubos By entering -1 in quantity that will reduce the stock level won’t it?
It’s not a massive issue, i can still allocate it to the sundry income account as it isn’t a high income.
That’s right. If this refund is not decreasing quantity in inventory, don’t enter any quantity amount (leave the field empty) and just enter negative unit price.
Great! will give it a go!
Thank you.
Works a treat!
Thank you.
Based on your case you have outlined the solution is quite simply.
Take up the Purchase Invoice as 2 items at 90 and put the 20 balance to your sundry income
Then put the Receive Money to Sundry Income - which will cancel out
@Brucanna solution is also good as it avoids negative “spend money” transaction. But in that case, I’d just put the amount you expect to receive from supplier in some asset account. That way you can see supplier is still to send you some refund until balance in asset account is cleared.
Just a suggestion.
I have tried the way @Brucanna suggested and it looks great, i shall use this approach.
Would be worried about using negative “spend money” transaction and how it may be affected by future releases.
I subtracted the discount amount off each item then added a line, selected the Sundry income account and entered description of the entry and the total discount.
When i receive the discount in bank account, i receive money and allocate it to the same Sundry income account which clears itself.
I know i should use an asset account as @lubos suggests, but i wont be using this method often, and i like my COA minimal without any accounts with zero balances where possible.
Thanks for your guidance.