How to register a Refund

MikeLE

I would like to cancel an invoice and create a refund, but not sure how to do that.
This is how I created the invoice:

• Estimate Created
• Estimated Converted to Invoice
• Customer paid by Wire Transfer
• Recorded a payment

Now need to refund $19,700 out of $19,900; (payment was not processed by Wave)
Please explain steps, how should I properly cancel an invoice and register a refund. I'm not an Accounting Pro.

Thanks,
Mike

Tucksedeauxs

I have the same issue. The best advice I found for those of us not using Wave Payments (though slightly convoluted) is this:
1. Create a duplicate negative invoice for the customer and amount refunded (-19,700, make sure to assign the original income account for the item/service).
2. From the invoice, record a negative payment (which will be the refund transaction you made).
3. If you have already made the refund, go back to the transactions page and delete that (now duplicate) transaction (NOT the one marked Invoice Payment), or do so immediately after making the actual refund.
[Note: You can't assign an outlay as an invoice payment from the transactions page.]

Good luck.

Rahim

Hi @MikeLE and @Tucksedeauxs

On the upgraded Accounting platform you can do the following:

1. Go to Accounting > Transactions
2. Add Expense
3. Add a description (Refund for Invoice X)
4. Choose the same account where the payment was deposited into
5. Enter the refund amount under “Total Amount”
6. Under category type refund and choose the “Refund sent for an invoice in Wave”
7. Type or scroll to find the invoice and select it.
8. Add the refund reason in the notes for your reference and save the transaction.
9. The invoice will now have the refund applied and will show as unpaid/overdue when you view it. In invoicing you can edit the new negative payment applied and change the method in which you gave the refund.

There are improvements I'm going to look at with my team to surface this within invoicing as well.

Thanks,

Rahim

TPA

@Rahim, that method works well. What do you do once, you've processed the refund and the invoice shows an amount due? ie because it was never paid by the client in full eg cancellation

Rahim

Hi @TPA

That will depend largely on the nature of the refund.

If you intend to recollect, you can send reminders and recollect the payment.

You can add an adjustment to the invoice if it's a change to the invoice (incomplete work, or something unavailable that you needed to refund)

Or you can write off the amount if it's considered bad debt. We have an article that outlines how to do this: https://support.waveapps.com/hc/en-us/articles/115000031243-Dealing-with-bad-debt-How-to-write-off-an-invoice

There may be other outcomes as well but the above are common flows people use.

Thanks,

Rahim

Jusmih

@Rahim said:
Hi @MikeLE and @Tucksedeauxs

On the upgraded Accounting platform you can do the following:

1. Go to Accounting > Transactions
2. Add Expense
3. Add a description (Refund for Invoice X)
4. Choose the same account where the payment was deposited into
5. Enter the refund amount under “Total Amount”
6. Under category type refund and choose the “Refund sent for an invoice in Wave”
7. Type or scroll to find the invoice and select it.
8. Add the refund reason in the notes for your reference and save the transaction.
9. The invoice will now have the refund applied and will show as unpaid/overdue when you view it. In invoicing you can edit the new negative payment applied and change the method in which you gave the refund.

There are improvements I'm going to look at with my team to surface this within invoicing as well.

Thanks,

Rahim

If you do it this way Rahim, it leaves an outstanding balance of the original amount outstanding, it also appears back in your dashboard saying there is amount overdue on the invoice? how do you fix that? @Rahim

TPA

@Jusmih thats exactly the problem I have. Refund processed and now the invoice is outstanding.

TPA

@Charlotte Hi, is there anyone on the team that can give a complete answer to the above question? Thank you

Rahim

@TPA I had posted a link in an earlier response around what you do with that outstanding amount. Once a refund is processed, the invoice goes back to an unpaid state. If you are going to collect again, you can do so, and if not, you can choose to write off that income or modify the invoice with a note to say that this was changed for reason x.

I am currently doing research on different states we may want to add to invoices so I will take this feedback for a "refunded" state.

Thanks,

Rahim

AndyK

Let's see if I've got this right.

I've just issued a refund for a customer who had paid for a service and was unable to proceed. I categorised the bank payment, the refund, as Refund for Invoice which then as noted adds a negative payment on the invoice but also makes invoice outstanding for the full amount again.

I considered simply editing the invoice to add an item with a negative amount to cover the refund but opted to use the Bad Debt procedure, which I have used previously for unpaid invoices.

This works but just seems a bit messy due to the extra steps and I now have three payments shown against the invoice, the original one, the refund, and the bad debt payment to Undeposited Funds. In my Transactions view I now have 4 transactions, the original payment, the refund to invoice, the Undeposited Funds payment and the Bad Debt expense.

Assuming I've done this right, I'm hoping this can be simplified to a couple of steps, categorising the expense as Refund sent for an invoice in Wave and changing the invoice state to Refunded, or something along those lines anyway. It would streamline things and be a big help.

Thanks
Andy

Samd

Hey @AndyK - it does sound like you've done everything right in this case, and the bad debt method is likely the most sound for writing off the invoice. We are looking to improve and streamlining our invoicing feature, so your feedback is much appreciated. In terms of making the bad debt/write off feature a little more accessible, what would an ideal workflow be for you? Would having a 'Write off' function in the invoice menu, where you could input a reason and have Wave automate the process behind the scenes be useful? Any feedback or insights into what would work best for your business is more than welcome.

NEXASport

Hi @Rahim ,
does the method you have detailed process the payment refund to the clients bank account, or is it just recording the details of the refund. I am trying to work out how to issues the refund payment.
Thanks, Daniel

AlexL

Hey @NEXASport . The steps Rahim outlined above are for accounting for a refund in your Transactions page. If you're looking to initiate an actual refund through Stripe, you can do so through the Stripe dashboard (Sales > Credit Card Payments). If you need further help with this, don't hesitate to reach out to Stripe Support who can help you process the refund.

BIRDYFLU

This is how I overcame this issue of refunding an invoice.

• Create an invoice for the customer
• Add the item and the price
• Add the same item but this time type the whole or partial refund amount in negative with a negative sign " - " in front.
• Put down a description that it's refunded.

If you've found it helpful please vote up! Thanks

AndyW

Hi, if I want to issue a refund against an invoice already paid, what's the best way to do this? Cancel the invoice? I couldn't see a credit note feature, but may not have been looking well enough!

Thanks in anticipation

AlexL

Hey @AndyW . I moved your thread into this one which should help you answer your question! If you do have any other questions, let us know!

JahkaraSlusher23_

> @NEXASport said:
> Hi @Rahim ,
> does the method you have detailed process the payment refund to the clients bank account, or is it just recording the details of the refund. I am trying to work out how to issues the refund payment.
> Thanks, Daniel

AlexL

Hey @JahkaraSlusher23_ . This method only records the details of the refund. Looks like you have an on-going ticket with an agent on our support team, feel free to follow up there and we should be able to get you sorted so you can issue that refund!

1NW

@Tucksedeauxs said:
I have the same issue. The best advice I found for those of us not using Wave Payments (though slightly convoluted) is this:
1. Create a duplicate negative invoice for the customer and amount refunded (-19,700, make sure to assign the original income account for the item/service).
2. From the invoice, record a negative payment (which will be the refund transaction you made).
3. If you have already made the refund, go back to the transactions page and delete that (now duplicate) transaction (NOT the one marked Invoice Payment), or do so immediately after making the actual refund.
[Note: You can't assign an outlay as an invoice payment from the transactions page.]

Good luck.

I like this method, because when you list a customer Statement, it shows a clear audit trail.

SBenoit

@Rahim said:

There are improvements I'm going to look at with my team to surface this within invoicing as well.

Hi Wave team! I'm wondering if these improvements are still planned? I have clients asking about how to record a refund from the Invoices page (as they rarely use the Transactions page). As a temporary workaround, Wave could simply allow us to record a negative payment from the Invoice itself (which is all a refund from the Transactions page ends up as, anyway).

Right now negative payments aren't allowed:

While refunds issued from the Transactions page show up as a negative payment:

It would be great to lift that restriction on negative payments until a more complete solution to refund/write-off management is rolled out.

Thoughts?

Thanks for your time.

Sebastien.

CallieP

Hey @SBenoit , thanks for reaching out! And thank you so much for sharing this feature improvement idea with us here. In terms of what Rahim had mentioned there, it was in reference to a) bringing the awareness to the team about this interest, as well as b) a back-end change of moving from our old invoicing platform to our new one. We recently completed this move, and can now begin building practical steps to building out feature improvements! That said, this thread isn't a feature request submission, but rather a feature idea discussion, so the ideas brought here aren't necessarily going to be brought to fruition. Our team is currently focused on improving other areas of the invoicing product right now, so this is not on the roadmap at present.

twa12345

There must be a better way to handle this. I have an invoice that was paid, then partially refunded without any work being done. Essentially the customer decided not to attend so essentially no work was done and they lost a non-refundable deposit. So in this scenario I don't have any bad debt or outstanding invoice/amount due. What I want to be able to do is:
1. Record the refund against the invoice
2. Reduce the income amounts by the refund amount so that my revenue is correct
3. Close out the invoice so that it no longer shows as over due or outstanding