Refunding All or Part of an Allocated Payment
If you need to refund all or part of a payment that has been allocated to an invoice, proper accounting practice is to keep the original invoice and payment unchanged so that you have a record of those transactions, and to then record the refund by first issuing a credit note and then refunding the credit note.
Step 1 - Creating the Credit Note
Whether you need to provide your client with a full refund or a partial refund, the process is the same and you can follow the steps below to create the credit note:
Click on "Billing" and then click on "Issue Credit Note".
Select the customer in the "Customer" field.
If you are providing credit for lessons, select the "Add Charge" option under the invoice line items and enter the amount you would like to credit to the customer's account. You can enter the details about the reason for the refund in the description field.
If you're creating a credit note for a package, only choose the "Add Package" option if you also want to reduce the number of hours in the customer's package. Otherwise use the "Add Charge" option so that only the amount they owe will be reduced and their package hours will not be changed.
Step 2 - Refunding the Credit Note
After the credit note has been created, you'll need to refund the credit note. This can be done by following the steps below:
Click on "Billing" and then click on "Invoices".
Enter the credit note number in the "Search" field and press Enter.
Click on the "View" button to view the Credit Note.
Scroll down to the "Issue Refund" form at the bottom of the Credit Note.
Enter the refund details and click on the "Record Refund" button.
Unallocating & Refunding a Payment
In the scenario that an invoice was created mistakenly or you are refunding an allocated payment but the invoice will still need to be paid in the future, you'll want to unallocate the payment, record a refund (and if the invoice will not be paid in the future, void the invoice).
Step 1 - Unallocating the Payment
Click on "Billing" and then click on "Invoices".
View the Invoice you'll be refunding and voiding by clicking on the "View" icon.
Unallocate the invoice by clicking the "X" icon next to the payment(s) on the invoice.
Step 2 - Refund the Payment
Click on "Billing" and then click on "Payments".
View the Payment(s) you need to refund by clicking on the "View" icon.
Click on "Options" at the top-right and select the "Refund" option.
NOTE: The "Refund" option will only be available after the payment has been unallocated from the invoice.
Step 3 - Voiding the Invoice
If the invoice will not need to be paid in the future, you can void the invoice by following these steps:
Click on "Billing" and then click on "Invoices".
View the Invoice you need to refund by clicking on the "View" icon.
Click on "Invoice Options" and select "Void".