Help with Invoice Refund
LisaCor
Member Posts: 1
Hi, I have quite a few invoices that I refunded but I can't figure out how to enter them properly in Wave. If anyone can help me out I would be so grateful!! Here's what happened... A client purchased a camp from our Shopify website (lets say it was $2000) but they only paid a deposit ($500). Shopify deposits the money into our account minus their merchant fee, so lets say they deposit $400. I made an invoice for the customer and applied the $500 (and in my transactions split the $400 so I had a $500 payment from the client and a $-100 merchant fee). HOWEVER, our camp was cancelled so I refunded the customer. Shopify took the $400 out of our account they had deposited and I assume they refunded the merchant fees to the customer as well. I just can't figure out how to enter this on their invoice, and show that the invoice is no longer owing. Any advice would be greatly appreciated. Thanks!!
Comments
Hey @LisaCor and Welcome to Wave's Community Forum! Sounds like quite a complex issue that you are facing mainly because it is a refund on an invoice and also because you are accounting for merchant fees.
In general, when you are recording income collected through a merchant processor, you can create the invoice and mark it as paid, which then should create an income payment transaction in the total amount of the invoice total. While the customer paid the entire amount, you didn't receive the entire income because you processed it through a payment processor - in this case Shopify! To show that Shopify took a fee for processing the payment, you will create an additional account in your Chart of Accounts under the "Income" Section and call it "Shopify Fees". Once created you will create a journal transaction that will credit the "Shopify Fees" account and debit the Sales account. This will allow for the Fees to split out, the invoice to be marked as paid, and the correct amount that you received to be shown as income for the business. This should be how you manage any of the payments that you receive through Shopify moving forward if you aren't already doing this.
In the case of refunds, you can use the refund expense transaction and categorize it as a "Refund for an invoice in Wave". That will allow you to select the invoice that you have marked as paid and attach a refund transaction to the invoice.