Getting Started: Refunds

Overview

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A refund is a physical exit of cash from your business to your customer. You’ll typically issue a refund when a customer has made a payment and you need to return those funds to settle the transaction and balance your books.

While credits keep revenue in-house, Refunds are essential for maintaining trust and staying compliant with consumer protection laws.

Processing a refund requires updating your records to reflect that the original sale has changed. To ensure your books stay balanced, follow these three essential steps:

1. Adjust the Invoice for a Refund →
   Before you can return any money, you must create an available credit balance. By adjusting the invoice total downward, you "free up" the necessary funds and create a surplus on the customer's account. This tells the system that this specific portion of the payment is now available to be sent back.
    
2. Record a Refund in Receivables →
   Once the credit balance is created, you must record the refund within your Accounts Receivable (AR). This step is crucial for your bookkeeping—it "clears" the credit balance you just created and ensures your reports show that the money is no longer held by your business
    
3. Submit a Stripe Refund in Your Workspace →
   If your customer paid via our Stripe integration, you can execute the physical transfer of money directly from your workspace. This moves the actual cash from your business account back to the customer's original payment method.