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How to enter a refund for customer in Microsoft Dynamics GP?

Every once in a while we have to refund a customer. For recording a refund in GP, you can use one of following three options:

  1. Refund customer for an overpayment (Credit Balance) in cash, using credit card or write a check
  2. Refund customer for a paid invoice (Return)
  3. Refund Checks Module

 

Option 1: Refund customer for an over-payment (Credit Balance)

For this you will need to enter a debit memo. Open the Receivables Transaction Entry window (Transactions >> Sales >> Transaction Entry), select Debit Memo in Document Type

Case 1: If you want to pay the customer in cash,

  1. Accept the default account distribution or change it as per requirements
  2. Post the debit memo.
  3. Apply the debit memo on the credit balance (over-payment)

 

 

Case 2: If you want to print a check for customer:

  1. In the debit memo distribution, credit an offset suspense GL account and debit the normal Accounts Receivable account. Post it.
  2. Apply the debit memo on the credit balance (over payment) to clear the customer balance.
  3. Open the Miscellaneous Checks window (Transactions >> Financial >> Miscellaneous Checks.
  4. Enter the Check details for the customer
  5. In distributions, use the same offset suspense GL account you used in debit memo on debit side for this transaction
  6. Print the check and post it.

Print check using Miscellaneous Checks

 

 

Option 2:  Refund customer for a paid invoice(Return)

When you enter an invoice for customer and apply cash receipt on it, cash account is debited and sales account is credited. For refund for an invoice, you will need to enter a Transaction of type Return with return amount:

  1. In the Receivables Transaction Entry window (Transactions >> Sales >> Transaction Entry), select the document type Return.
  2. Enter the value of the returned invoice in Sales field
  3. In the Credit Card field or cash enter the amount to be refunded. You can also enter check amount but this will not be automatically printed from system you will need to manually write the check. For printing the check, don’t enter the payment details with return.  Refer to case 2 of option 1. Use and offset suspense GL account while entering the return and use the same offset suspense GL account for printing a miscellaneous check
  4. When the small window opens up, select the current checkbook to be used to record the payment
  5. Post the transaction

This type of transaction will credit the cash account and debit the return account.

Note: If you are using the Sales Order Processing, you will need to enter the return in the Sales Transaction Entry window (Transactions >> Sales >> Sales Transaction Entry). This will also adjust the inventory items

 

Option 3: Refund Checks Module

If you write checks to customers often, you should consider implementing Refund Checks module in GP. You can use this write check for one or more customers to clear the credit balance or for specific documents.  It automatically creates a debit memo and applies to the customer account. Also, creates a payables check or EFT transaction for the customer by creating a temporary vendor for the customer . Refer to following blog post by Frank Hamelly for details about using the Refund checks

GPTip42day – Printing Customer Refund Checks

Or You can watch a video by Belinda Allen

How to create a Refund Check in Dynamics GP‏ – YouTube

 

 

 

 

4 Responses to “How to enter a refund for customer in Microsoft Dynamics GP?”

  1. [...] How to enter a refund for customer in Microsoft Dynamics GP? | Dynamics GP Help (Rubal) – discusses in detail, the various options related to customer refunds.  [...]

  2. [...] recently had written a post about the entering refund for customers. Today I am going to discuss various scenarios about entering refund from vendor in Microsoft [...]

  3. Cathy says:

    here is what I did, the customer had a credit balance of 1000.00 which was paid via credit card. In order to refund her the money on her credit card, I created a return in the accounts receivable module refunded her credit card. I am not sure what the distributions would be on this return. I can not apply a return and a payment to one another. How will I fix this? I know that I will need to some how created two debit memo’s but what accounts will should they hit? Also what accounts should the return hit inorder to clear this up? The orginal payment hit cash/accounts receivable, although in a perfect world you would think that I could just reverse this out but it is not right. I need some help, thanks!

  4. Rubal says:

    Hi,

    As per my understanding, you have a customer with credit balance (overpayment) of 1000 and you want to refund this amount via credit card transaction. If this is correct you can handle it the way Refund Check module does in GP:
    1. First of all, you don’t need to enter the return as you already have credit balance from credit card payment received from customer. I am assuming you have not posted this return as you are not sure account GL accounts.
    2. You can create a debit memo for the customer and apply it on the customer balance. In account distribution, accounts receivable account will be debited and on credit side you can use a suspense account. You can use any GL suspense account as its balance will be cleared at end of transaction.
    3. Now, create a temporary vendor corresponding to the customer. You will use this vendor to record a credit card payment you made to customer.
    4. Enter a Misc Charge for the temporary vendor. In GL distribution, AP account will be credited and on debit side use the suspense same as in step 1.
    5. Enter a credit card payment from the vendor using the Manual Payment Window
    At the end of these steps, customer balance should be cleared and a credit card payment will be recorded corresponding to payment you made to customer. Enter proper descriptions in these transactions to describe it was a refund.

    Thanks,
    Rubal,
    http://www.dynamicsgphelp.com/

  5. Nishant Sonker says:

    Plz help me about how to edit the payables transaction credit memo through c# code.

    Thanks & Regards
    Nishant Sonker

  6. Rose says:

    Hi. I read this article about refunding an overpayment in GP. I have a customer who has overpaid an invoice, and now has an unapplied credit on their account. They would like this refunded to them as a credit memo, which would then be applied to a future invoice. What entry would be made to accomplish this?
    Thank you.

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