Payments and Refunds
There are three options for recording the payment of invoices and the refund of credit notes.
Where possible, we recommend that you make use of the third option, the Bank Statement Import, to enter these transactions. This will enhance efficiency, accuracy and transparency in managing your payments and receipts.
However, when using the Bank Statement Import, timing differences can arise between the actual transaction date and the date that the value appears on your bank statement. This is especially relevant if you are registered for Cash Accounting VAT which has special rules regarding the payment date and the relevant date is not always considered to be the date that the cash/credit card/cheque clears in your bank statement (see HMRC website for further details). Therefore, in some cases, it may be more appropriate to use option one or option two as detailed below. This can then be followed by a 'matching' activity when the transactions clear on an imported bank statement, which will avoid duplicate entries.
The three options for entering payments and refunds are:
1. Directly from an invoice or credit note
Payments and refunds entered in this manner have the benefit of certain fields being pre-filled based on the invoice or credit note values.
- Enter Payment directly from Invoice
- Enter Refund directly from Credit Note
- View/Edit Payments and Refunds
2. In the Bank Transactions section
Payments and refunds entered in this manner are not initiated from an invoice or credit note. The relevant invoices or credit notes are instead selected from within the Receive Money or Spend Money transaction.
Click here for more help on this option.
3. Bank Statement Import
Import a bank statement file to create payments and refunds directly from the line items of the statement.
Any items already entered using option 1 or option 2 above, should be 'matched' during bank statement import processing, to avoid duplicate entry.
Click here for more help on this option
Enter Payment directly from Invoice
Navigate to the Purchases tab.
Open an existing invoice in View/Edit mode. Use the Purchase Invoice options drop down list to select the Enter Payment option.
The New Spend Money popup will appear with most fields pre-filled including the invoice you are entering the payment for. All fields can be changed if required and additional invoices can be selected for inclusion in this payment.
Make sure to specify the bank account from which the money is being paid.
Click the Save button to complete the transaction.
Go to Supplier Invoice Payment for a more detailed explanation of the field entry requirements.
Enter Refund directly from Credit Note
Navigate to the Purchases tab.
Open an existing credit note in View/Edit mode. Use the Purchase Credit Note options drop down list to select the Enter Refund option.
The New Receive Money popup will appear with most fields pre-filled including the credit note you are entering the refund for. All fields can be changed if required and additional credit notes can be selected for inclusion in this refund.
Make sure to specify the bank account into which the money is being received.
Click the Save button to complete the transaction.
Go to Supplier Refund for a more detailed explanation of the field entry requirements.
View/Edit Payments and Refunds
Navigate to the Banking tab and click on Bank Transactions.
Select the appropriate bank account from the drop down list.
Click on a transaction to view or edit the entry.
All fields will be available for editing unless the transaction (or line item) is already included in a Bank Reconciliation or VAT Report. Although inadvisable, it is possible to unreconcile bank items and delete VAT Reports in order to edit transactions. Careful consideration should be given to any representations already made to external parties such as the HMRC.