Create a refund for an overpaymentLast updated on 03/13/2023
If you receive an overpayment from a customer, you can issue a refund by check or credit card. Refunds are recorded so your Accounts Receivable (AR) balances stay up to date. For check refunds, add a refund task item to your pricebook before you begin issuing refunds.
Things to know
With Payment Collections, you can no longer add a negative payment directly on the original invoice. Review your workflow and see if any adjustments need to be made.
The method of refunds below are for overpayments. For job refunds, see Create a refund adjustment invoice and issue a refund.
Add a refund task item in pricebook
Before you create a check or credit card refund, add a refund task in your pricebook using these parameters:
Name: Refund task item.
Description: To capture refund of payment from customer. This task will offset the AR of the payment to refund and increase Refund Liability.
Unit Price: Leave it at $0.
General Ledger Account: Map your task to a general ledger (GL) account used to track refund liability.
Note: After you add the refund task in your pricebook, use it every time you need you to create a check refund.
Create a refund for an applied payment
To refund an applied payment:
Go to the navigation bar and click Search
.From the search dropdown, select Payment then click Search
.
Click the payment you want to refund.
The invoice record opens.
Create an adjustment invoice for the payment:
In the side menu, click Add an adjustment invoice. A confirmation pop-up opens.
Click OK.
Click Add a payment:
Amount: Enter a negative payment for the amount you want to refund.
Type: Refund payment type.
Paid On: Date refund initiated.
Memo: Additional details about the refund.
Note: The memo appears on the customer invoice.
Authorization Code: If the payment type is a credit card or ACH, enter the authorization code, if available.
Note: This can be done for any payment type: cash, check, credit card, or ACH.
When you’re finished, click Save.
.
Create a check refund for an unapplied payment
Checks can't be refunded directly from ServiceTitan. Create a refund record in ServiceTitan to ensure the refund creates a balance in your Refund Liability account in your accounting system or the equivalent liability account. From your accounting system, you can issue a check to your customer.
Note: You can process ACH and credit card refunds directly in ServiceTitan.
To create a check refund for an unapplied payment:
Go to the navigation bar and click Search
.From the search dropdown, select Customer then click Search
. Select the customer you want to create a refund for. The customer record opens.
From the Invoices section, click Collect Payment.
Under Payment Details select Credits.
In the Available Credit tab, click the invoice number next to the payment credit you want to refund.
The invoice record opens.
In the side menu, click Add an adjustment invoice. A confirmation pop-up opens.
Click OK.
In the side menu, click Add a task.
Enter the refund task item details you created for check refunds:
Name: Refund task item.
Description: Refund description.
Quantity: Leave it at 1.
Unit Price: Payment amount you want to refund.
General Ledger Account: Map your task to a GL account used to track refund liability.
When you’re finished, click Save. Now your adjustment invoice has a task with the same amount as the payment you want to refund.
From the adjustment invoice, click the original invoice link.
In the side menu, click Collect and apply payment. The Collect and Apply Payments screen opens.
Under Payment Details, select Credits.
In the Available Credit tab, select the credit you want to refund.
Under Apply Payment, select Apply to Invoice.
Select the adjustment invoice you created for the refund.
When you’re finished, click Save.
After you export the refund, you can issue a check from QuickBooks to your customer.
Create a credit card refund
Credit cards can be refunded from ServiceTitan if the payment was originally processed through ServiceTitan. To refund a credit card you need to reverse the payment by reducing your Bank GL account balance without passing the transaction through a Refund Liability account. Therefore, recording credit card refunds involves negative payments rather than invoice tasks.
To refund a credit card:
Go to the navigation bar and click Search
.From the search dropdown, select Payment then click the Search
.
Click the payment you want to refund.
The invoice record opens.
In the side menu, click Add an adjustment invoice. A confirmation pop-up opens.
Click OK.
In the side menu, click Add a task.
Enter the refund task item details you created in your pricebook:
Name: Refund task item.
Description: Refund description.
Quantity: Leave it at 1.
Unit Price: Payment amount you want to refund.
General Ledger Account: Map your task to a GL account used to track refund liability.
When you’re finished, click Save. Now your adjustment invoice has a task with the same amount as the payment you want to refund.
From the adjustment invoice, click the original invoice link.
In the side menu, click Collect and apply payment. The Collect and Apply Payments screen opens.
Under Payment Details, select Credits.
Select the payment credit you want to refund.
Under Apply Payment, select Apply to Invoice.
Select the adjustment invoice you created for the refund.
When you’re finished, click Save.
Go to the invoice where the payment was applied and process the refund.
After you process the refund, remove the task that was added to the adjustment invoice because you don’t need this task since the credit card payment has been applied to the invoice:
In the Adjustment Invoices section of the invoice, click the Pencil icon for the adjustment invoice you want to remove the refund task.
Click the x icon next to the refund task you want to remove.
Add a negative payment to the adjustment invoice equivalent to the amount you want to refund:
Click Add a payment and add a negative payment equivalent to the amount you want to refund.
When you’re finished, click Save.
Export both positive and negative payments to your accounting system.
Important note: Some features may not be currently included in your account and additional configuration may be required. Please contact technical support for details.
Disclaimer: Information provided in this article is for informational purposes only and it should not be construed to be legal advice. Information provided in this article may also not constitute the most up-to-date legal or other information. You should not act or refrain from acting on the basis of any information in this article to meet any compliance requirements without seeking independent legal or other professional advice.