Refund
marpie76
Member Posts: 5
I'm very new to Wave and just issued my first refund using Wave. I have refunded $100 out of $250 back to a student. Their invoice originally said 0.00 due after they paid the 250. Now after the $100 refund it says $100 is due. I'm confused...
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Hi, @marpie76,
Yes, that's normal. Your invoice was still issued and will continue to exist, and as far as Wave can see, it hasn't been paid in full, since the refund counts as a negative payment against that invoice.
To mark is a paid, you'll have to write-off that $100. We have a guide explaining how to do this here.
Try following those instructions and let me know if you run into any issues.
I saw that article the other day and used it for bad debt on invoices I know I'm not getting paid for. So for all refunds, the Wave invoice will show amount due and I will have to "write-off" that amount? Should I create another category instead of "bad debt"?
Hi, @marpie76,
You can name that account whatever name makes the most sense to you. Is this refunding part of your usual workflow for invoices in general? If so, could you give me more information about this process and your business? I might be able to offer a better alternative if I have more details about what's happening in the real world.
If this is a safety deposit, for example, the process would be a bit different.
We are a private career school. Sometimes a student will drop the class and we have to give a partial refund. Sometimes I refund using the payment section if they paid with a card, sometimes we write a refund check. I'm still not sure how to create a refund in wave when I send a refund check...
Hi, @marpie76,
I'm happy to show you. Do you ever have to refund by cheques payments that were done through Wave? I'm asking because if you do this, Wave won't be able to refund parts of its processing fee. If you're refunding 50% of an invoice, for example, we would also refund 50% of our fee, saving you a bit of money. The process for accounting for refunds handled like that might be a little more complex as well, so let me know if this is something you've encountered.
If you've recorded a payment for the invoice manually and are refunding them by cheque, here's how you would account for it.
This process is a little convoluted in the old version of Wave, which you are using. This is because in that version, you can't add a payment to an invoice marked as fully paid, and refunds are always categorized as payments with a negative amount. In the new version, there is a "refund" option in categories, which makes the whole process much, much simpler, and doesn't require you to remove the original payment and add it again after the fact. While this doesn't help you immediately, know that we are working at bringing you a better way to handle this process.
I have not used the refund via check in Wave. I will eventually have to though. I was going to follow the steps you outlined above, but I think my Wave was upgraded to the new version? It has a different look, but maybe it is just the branding and I still have the old version..
Hi, @marpie76,
No, Wave's rebrand is an entirely separate update from our ongoing accounting feature update, coming from different teams across Wave. We're currently working on migrating all Wave accounts that still the old version of Wave as soon as possible. Migration takes time because we have to ensure feature parity and maintain the integrity of your data.
this method of accounting for refunds is counter-intuitive.
leaving an invoice showing as owing is NOT the same thing as issuing a refund to a customer/client.
is this on the list to be changed?
we don't want "accounts receivable" or "bad debts" showing on our books... that's a totally different thing than refunding a customer for something that was cancelled, or if they change their mind about a product or service, or if they need to be assauged in order to keep them as a customer.
How do we properly account for these?
it's similarly illogical for discounts... it would be a lot better for our accounting if a discount was a discount, not a negatively-priced line-item. Discounts can be used as tax writeoffs, if they are handled as %'s or flat fees, and able to be pulled out in reports as such...
Hi @comoxvalleyarts ! If you're adding a discount to an invoice, for example, you should be able to simply add a negative line item for the amount you wish to discount, resulting in a fully paid invoice.
@Charlotte what if the invoice is already paid? Do I still add a line-item for a discount? Won't that show as the invoice not being fully paid after doing that?
Thanks!
Tatia
@tatiav If the invoice is already paid, you're right, you don't want to add a negative line item to it as that will change the status of the invoice from 'Paid' to 'Overdue'. If you'd like to retroactively add a discount to a paid invoice, I'd actually recommend just issuing a partial refund for that invoice. You can do that by heading to Sales > Payments > Refund > edit the amount to reflect the discount. Your invoice status will change to 'Overdue' and then you can create an undeposited funds account in order to write off the rest of the invoice! This Help Centre article details exactly how to do that in Wave: https://support.waveapps.com/hc/en-us/articles/115000031243-How-to-write-off-an-invoice