Enter customer refunds and other payments

Find this screen

Open: Customers > Enter Transactions > Sales Payment.

Watch a video

Record customer and supplier payments and receipts (video)

How to

Enter a refund

Open: Customers > Enter Transactions > Sales Payment.

Select the Bank account.
Click Clear or tab to the Code field.
Choose the customer from the Code, Short Name or Postcode drop-down list.
Enter the details:
- Date - This defaults to today's date.
- Reference and Second reference if required.
- Cheque value - Enter the refund amount.
- Settlement discount - if applicable.
To save the refund:
- Click Save to save without allocating.
- Click Save and allocate to allocate the refund.
  
  Note: When you allocate a payment/receipt, the allocation date will default to either today's date or the payment/receipt date. This depends on what you have chosen as the Default allocation date in Customer Defaults and Settings.
- If you entered a refund whilst you're reconciling your bank account, you can click Save & Create Rule to create a bank feeds rule for this transaction, to save you entering it again the next time.

Enter a foreign currency refund

When you choose a foreign currency customer, additional cheque currency, exchange rate and bank charges boxes are displayed.

If there is an exchange rate gain or loss between the transactions, this is dealt with by Sage 200 automatically.

Enter the following additional details:

Currency - The customer's currency is entered by default. Select a different currency if required.
Exchange rate - The current rate is displayed. Click to change this.
Bank charges - Enter if applicable. Bank charges are entered in the same currency as the bank account.

Note: If you want bank charges to be included in your VAT return, then don't enter your bank charges here. Instead, you should enter the bank charges as a separate Nominal Vatable Payment or Nominal Vatable Receipt, using the appropriate VAT rate.
Save the refund:
- To save without allocating, click Save.
- To save and allocate it, click Save and Allocate.
  
  Note: When you allocate a payment/receipt, the allocation date will default to either today's date or the payment/receipt date. This depends on what you have chosen as the Default allocation date in Customer Defaults and Settings.

Useful info

About refunds with settlement discounts

A settlement discount is where you offer a discount if your customer pays an invoice early. You usually specify the number of days the invoice has to be paid within to qualify for the discount.

If the invoice is paid within the agreed number of days, then you allow the full discount value when you enter the payment.

In the UK, if the invoice is paid within the settlement discount period, VAT is only charged on the discounted amount (Goods value minus Discount value).
In Ireland, VAT is calculated at the goods value regardless of any settlement discount.

See an example

You offer a settlement discount of 5%:

You record the details of an invoice for £100. VAT is calculated at £20. You enter the discount percentage and amount which is £5.
You receive payment for the invoice within the specified period and the customer has taken the discount, so they pay you £114. This is the gross amount (£120) minus the net discount (£5) and the discounted VAT (5% x 20 = £1).
You record the receipt and enter the cheque value as £114 and add the discount value as £5. This creates a transaction value of £119.
You allocate the invoice (£120) to the receipt (£119). The VAT discount of £1 is still outstanding
You create a credit note for the VAT discount of £1.
You allocate this to the remaining balance on the invoice.

Transaction	Nominal Account	Debit	Credit
Invoice	Debtors Control	120
	Net		100
	VAT		20
Receipt	Discounts Allowed	5
	Bank Account	114
	Debtors Control		119
Credit Note	Debtors Control		1
	VAT	1

About refunds with a currency gain or loss

If the exchange rate used for the refund is different to the exchange rate used for the payment, Sage 200 automatically works out the currency gain or loss and posts it to the Nominal Ledger, when the refund is allocated. When this occurs, the following additional transactions are posted with a reference of REVALUE:

For a currency gain.

Nominal Account	Debit	Credit
Debtors Control Account	Amount of gain
Revaluation Account		Amount of gain

For a currency loss.

Nominal Account	Debit	Credit
Debtors Control Account		Amount of loss
Revaluation Account	Amount of loss

Create rules for bank feeds reconciliation

If you enter a refund whilst you're reconciling your bank account, you can click Save & Create Rule to create a bank feeds rule for this transaction, to save you entering it again the next time.

For example, if you make a regular payment for your energy bills each month, you could set up a rule that recognises your bank payment to the energy company, and then creates the matching nominal transaction for you.

You can create bank feeds rules whenever you add a new transaction in Bank Feeds Reconciliation.

See Bank feeds rules.

Fix it

Why is the date highlighted in red?

This is because the date does not fall within any of your accounting periods.

Check the date and try again.

What happens when I

Save a refund?

The nominal account and customer account are updated immediately, unless the refund is dated in a future period. In this case, the transaction is posted when the period is opened.

The following table shows the nominal account postings:

Nominal Account	Debit	Credit
DebtorsControl Account	Refund Value
Bank Account		Refund Value

The customer's account balance is increased by the refund value.

Save a foreign currency refund?

The Nominal Ledger is updated. This table shows the nominal account postings:

Nominal Account	Debit	Credit
Debtors Control Account	Payment value in base currency
Bank Account		Payment value in base currency

The customer account is reduced by the payment (refund) value in the original currency.

If the payment (refund) is allocated to an invoice, and there is an exchange gain or loss, the following postings are made to the Nominal Ledger.

Nominal Account	Debit	Credit
Debtors Control Account	Gain	Loss
Revaluation Account	Loss	Gain

Save a refund with a settlement discount?

The following table shows the nominal account postings:

Nominal Account	Debit	Credit
DebtorsControl Account	Total refund value: refund +discount
Bank Account		Refund Value
Discounts Allowed		Discount Value

The customer's account is increased by the total refund value.

Sage is providing this article for organisations to use for general guidance. Sage works hard to ensure the information is correct at the time of publication and strives to keep all supplied information up-to-date and accurate, but makes no representations or warranties of any kind—express or implied—about the ongoing accuracy, reliability, suitability, or completeness of the information provided.

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