How to Process Vendor Refunds Cheques


Received a refund cheque from the Vendor for returned goods. What is the best way to process the payment so that the item price gets adjusted?



1- Issue a PO Return for the returned items, referencing the original PO receipt number. This will adjust the Price and quantity of your Item. 

2- Issue a PO Credit Note Referencing the PO Return's document Number.

3- Run Day End. This will force the PO to create a batch in AP Transactions - Invoice Batch List. The Description of this batch will be "PO Generated batch"

4- Post the PO created batch in AP.

5- Issue an AP Debit Note to a clearing or suspense account in the GL. Apply this to the AP credit note that came from PO. Make sure to zero out the taxes at this point. The debit note should be for the full amount of the refund. If the Taxes are processed separately, then the tax will go to a different GL account.

6- From AR module, issue an AR Misc Receipt for the full amount (including the taxes) don't put the tax in separate. Code this misc receipt to the same GL account as the AP Debit note in step 5. This will clear it out and there will be no net change in the GL. Post the batch in AR and make sure the transaction has flowed down to GL.. Post the AR misc receipt to the same gl account as the AP debit note.

7- You can now deposit the cheque in your Bank account.

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