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Supplier refunds

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How to record a refund received from a supplier in Sage Accounting.


How this works

  • If you import bank transactions from a bank feed or bank statement, you can only match the refund to an existing credit note
  • If you have already received the credit note, then enter the refund and match it to the credit note
  • If the refund is to repay an overpayment saved as a payment on account, enter the refund and match it to the payment on account. Read more on how to record an overpayment to a supplier
  • If you have received a refund for a cash purchase where you don't have an invoice or credit note, use the Refund for a Purchase option. Read more on how to enter money in as a cash refund
  • If you use the VAT Cash Accounting scheme, the refund shows on your next VAT return

Match a refund from a bank feed

If you use bank feeds, you can only match the refund in your bank feed to the credit note it's paying.
  1. Enter the credit note first. Read how to create purchase credit notes.
  2. From your bank feed, find the refund and choose Match.
  3. Select or search for the relevant credit note. Select the check box to match the credit note and create a refund.
If the refund is to refund a supplier payment,
  • Discard the transaction from your bank feed
  • Enter the refund manually
If you need help with bank feeds, read about how to process incoming bank transactions.

Enter the refund and match it to a payment or credit note

Follow these steps to refund a payment or credit note that you have already received.

  1. From Banking, open the correct bank account.
  2. Select New Entry, then Sale/Receipt.
  3. Select the Supplier Refund tab. Enter the supplier, bank account, payment method, date and amount of the refund. If required, you can also enter a reference.
  4. Select the check box next to the credit note or payment on account the supplier refund is for. You can't refund part of a payment on account or credit note from here.
  5. Save the refund.

Partial refunds

When you need to refund part of a payment on account, follow these steps.

Example: You have a £100 payment on account and you want to refund £80, leaving £20 as a payment on account.

  1. Edit the payment on account: Go to the original payment on account record. Edit it to reflect the new amount you wish to retain. For example, change a £100 payment on account to £80.
  2. Record a New Payment on Account: For the remaining amount, create a new payment on account. In this case, record another payment on account for £20, dated the same as the original payment.
  3. Refund the Adjusted Amount: Now, process the refund of £80. This refund will correspond to the adjusted amount in the payment on account.

Refund a credit note directly

Use this method to refund the entire value of a single credit note.

You can’t refund part of a credit note. First, allocate the credit note to the correct invoice. Then refund the outstanding value.

If you need help allocating transactions, read more about allocating existing transactions.

  1. Select Purchases, then Purchase Credit Notes.
  2. Select the correct credit note.
  3. Select Record Refund. Then check or enter the amount, date, bank account and payment method of the refund. If required, you can also enter a reference.
  4. Select Refund.

Related Solutions

Create purchase credit notes

Process incoming bank transactions

Edit a supplier refund

Delete a supplier refund