FAQ: Refunding Money

Can I refund a sales receipt or only an invoice?

You can refund both invoices and sales receipts. The steps are the same: find the document, click Refund, choose full or partial, and select the refund account. Sales receipts often represent point-of-sale sales, so refunds are processed the same way as invoices.

What is the difference between a full refund and a partial refund?

A full refund returns the entire amount of the document. Use this when a customer returns all items or you need to cancel the entire order. A partial refund returns money for only some items or a portion of the quantity. Use this when a customer keeps some items but returns others, or disputes only part of the bill.

What account should I choose for the refund account?

The refund account is where the money will come from or go to:

• For customer refunds (paying back to a customer): Choose a Cash or Bank account. This shows money leaving your business.
• For vendor refunds (receiving money back from a vendor): Choose a Cash or Bank account. This shows money coming into your business.

Ask your accountant or administrator if you are unsure which account to use.

If I refund a customer, does their balance go down?

Yes. When you record a refund to a customer, their Accounts Receivable balance (what they owe you) is reduced by the refund amount. If the customer had paid in full, the refund creates a customer credit balance that they can use toward a future purchase or you can pay back in cash.

If I receive a refund from a vendor, does my balance go down?

Yes. When you record a refund from a vendor, your Accounts Payable balance (what you owe the vendor) is reduced. If you had already paid the vendor in full, the refund creates a vendor credit balance that you can use to offset a future purchase from them or request as a check.

Can I refund an invoice that is already fully paid?

Yes. You can refund an invoice regardless of its payment status. When you refund a paid invoice, the system records the refund separately and creates a customer credit or issues a cash refund, depending on your setup. The original payment record remains in your system for audit purposes.

What happens to inventory when I issue a refund?

If you refund items (full or partial), Usystems increases your inventory quantity to reflect the items coming back. This assumes the customer is returning the actual goods. If the refund is for a service or the customer is not returning goods, the inventory may not change—ask your administrator.

What happens to taxes when I refund?

If the original document included tax, the refund reverses that tax proportionally. For example, if you refund 50% of an invoice, 50% of the tax is reversed. This is done automatically by Usystems and is reflected in your tax reports.

Can I undo a refund?

No. Refunds cannot be deleted once approved. If you need to reverse a refund, you must record a new transaction. Ask your administrator if you need to correct a refund error.

What if the customer disputes the refund amount?

If there is a discrepancy, do not delete the refund. Instead, record an additional refund (for the difference) or contact your accountant. Keeping all transactions in the system preserves your audit trail and makes it clear what happened.

Can I refund in a different currency than the original document?

Refunds are typically processed in the same currency as the original document. If you need to refund in a different currency (for example, USD when the invoice was in AFN), consult your accountant—this may require a manual adjustment or currency exchange handling.

What if I have not yet received the refund money from the vendor?

You can still record the refund in Usystems once you have agreed with the vendor on the amount. Recording it early keeps your Accounts Payable balance accurate. When the money actually arrives, it will post to the refund account (bank or cash) you selected.

Why does the refund show "Draft" status?

New refunds start in Draft status. This means the refund is recorded but not yet finalized. You must Approve or Submit the refund to move it to Active or Refunded status. Only then does it appear in your financial reports.