Understanding the Refund Process

Devin Patrick

Mar 20, 2023

1778

Up through September 30 2021, when refunds were processed, the GrowthZone system did not create any AR transaction when a payment was refunded; nor did it re-open an invoice. This is referred to as legacy refund processing.

As of October 1 2021, new refund processing will allow for re-opening an invoice, and creating AR entries. This occurs when you have the Refund Type selection set to “Open Balance”. Check your setting under Setup > Finance > General Settings.

"Open Balance" is the default for all new databases. Existing customers created prior need to enable the Open Balance selection.

With the “Open Balance” option enabled, you will be able to process refunds following manner:

A refund will reverse the original accounting entries in the past and offset them if they are in the future.
When creating refunds you will have the option to:
- Write off the opened up balance on the invoice. This is the default option, and will refund the specified items on the invoice.
- Leave Invoice Open: this will occur when the refund is processed.

OVERPAYMENTS:

If the payment was an overpayment and not applied to anything it will just reverse the accounting and NOT open the credit balance on the contact and NOT open the overpayment balance on the payment
If the payment was an overpayment and was applied to an invoice, it would open the invoice balance and NOT open the credit balance on the contact and NOT open the overpayment balance on the payment

The option to set your preferred Refund Type is now available under Setup -> Finance -> General Settings. You can choose between the original refund type, called "Legacy Refund" and the newer option called "Open Balance".