How to enter supplier refund

This article will explain how to use a workaround on how to add supplier refunds in Sage Accounts Production.

You’ve entered an invoice for a supplier for £100.

You pay the supplier £100, so you enter a payment of £100. This clears the supplier's account.

You have to refund the supplier £100. Negative payments can’t be processed in Sage Accounts Production.

To create a refund a purchase credit note will have to be entered to clear the invoice that was issued for £100.

The balance on the supplier's account will now be £-100. 

A zero-rated invoice for £100 will now be issued to clear the payment and the balance for the supplier will now be zero. This invoice will also debit the suspense account 999.

To create a refund for the supplier:

To clear the invoice posted to the supplier a purchase Credit Note will have to be issued.

Dr. Supplier £100

Cr. Purchases £100

An Invoice and Receipt will now have to be issued to Refund the Supplier and Clear the Bank Account.

There are two steps involved in this process. 

1. To create a Zero Rated Purchase Invoice to the supplier
   
   Debit the Suspense Account – 999
   This will create the effect of refunding the supplier
   
   
2. To raise a Receipt 
   This will clear the amount form the Bank Account and also clear the Suspense Account