How to enter a customer refund?

You have entered an invoice for a customer for £100.

The customer pays you £100, so you enter a receipt of £100. This clears the customer's account.

You have to refund the customer £100. Negative payments can not be processed in Sage Accounts Production.

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

The balance on the customer's account will now be €-100.

A zero-rated invoice for €100 will now be issued to clear the receipt and the balance for the customer will now be zero. This invoice will also credit the suspense account 999

To clear the Bank account, a cheque payment will have to be entered which will debit the Suspense account, which will then be cleared.

To create a refund for the customer:
To clear the invoice posted to the customer a Credit Note will have to be issued.

Dr.Sales £100
Cr. Customer £100

An Invoice and Cheque will now have to be issued to Refund the customer and clear the Bank Account

There are 2 steps involved in this process.

1. To create a Zero Rated Sales Invoice to the customer.
   
   Credit the Suspense Account – 999
   This will create the effect of refunding the customer
   
   
   
   
2. To raise a Cheque Payment
   
   This will clear the amount from the Bank Account and also clear the Suspense Account