When a creditor or supplier issues a refund that needs to be returned to the owner, process it as an expense credit note in your Client/Trust Account, then allocate the credit as a refund and reconcile it in the bank statement.
Step 1: Create an Expense Credit Note
Navigate to Income & Expenses and select Create Expense Credit Note.
In the From field, enter the creditor's contact name.
Use the same account code as the original expense invoice.
Select the appropriate ledger for the funds being returned.
Click Save & Approve.
Step 2: Allocate and Process the Refund
Open the expense credit note and click Allocate Credit.
Select Refund to process the incoming payment.
Step 3: Reconcile with the Bank Statement
Go to Client/Trust Accounts > View Bank Statements.
Locate the received transaction in your bank statement.
Match and reconcile it against the paid expense credit note, which appears as an unpresented deposit.
The funds will then sit as a credit against the selected ledger, ready for disbursement to the owner.
In Asia-Pacific, "Trust Account" is standard; European customers use "Client Account". Client/Trust Accounting does not apply to North American customers. For more information, see our Glossary of Regional Terminology.