Credit and refund an invoiced sale

A credit memo reduces a sale or gives the customer a credit. A refund records money returned. Choose the route that matches the original transaction before creating either one.

Choose the route

Situation	Route
Deposit or overpayment still unapplied	Refund the original unapplied payment; do not reduce a sale that never occurred.
Unpaid invoice needs a reduction	Create a credit memo and apply it to the remaining invoice balance. No cash refund is needed for money never received.
Fully paid sale is partly or fully returned	Create the appropriate credit memo, then refund its available credit or leave it on account by agreement.
Partly paid sale is canceled	Separate the unpaid balance to be credited from cash actually received and potentially refundable.
Provider already reversed a payment or opened a dispute	Review its status and existing Bokeping records first; a second manual refund may duplicate the reversal.

Create the credit memo

1. Open the original invoice. Where available, use Create Credit Memo from Invoice so the new credit retains its source relationship. Otherwise start from Sales & Receivables → Credit Memos → New, retaining the original invoice reference.
2. Check Customer, Credit Memo No., Credit Memo Date, Reason, and Reference No..
3. Review every copied line. Keep only the quantities/amounts being credited, with the appropriate tax and discount treatment. A partial return should not credit the whole invoice.
4. For inventory, review Return items to stock when shown. Turn it on only when the relevant units should actually return to tracked stock. A price allowance without returned goods should not increase stock.
5. Review the total. Save posts the credit; Save as Draft does not make it available for application or refund.
6. Inspect the saved credit before proceeding. If an optional Apply to invoice action fails after saving, inspect both records before retrying; do not create a second credit memo.

For returned stock, starting from the original invoice preserves the sale’s cost relationship. A standalone return may use a different cost basis. Review the stock and cost impact instead of also recording a separate inventory increase for the same return.

Example: a $100 service allowance

Open full-size screenshot ↗

A filled, unsaved service example. The original item price was $500; the credit line was changed to the $100 allowance. No goods are being returned, and no credit or refund was posted.

A service allowance reduces the sale by the agreed amount. If goods are involved, review the source invoice and stock-return choice instead of copying this no-inventory example.

Reduce an unpaid balance

Use Apply Credit to Invoice on a posted credit with an available balance, or Apply credits on the destination invoice. Apply only the intended amount and review the date and resulting invoice balance. If a credit should stay available for a cash refund, do not spend that same amount against another invoice.

Record the cash refund

1. Confirm the actual refund through the bank/provider workflow and check whether Bokeping already recorded it automatically.
2. For a refund that still needs a bookkeeping record, open the posted credit memo with available credit and choose Refund Credit Memo.
3. Review Refund date, From account, and Amount against the repayment. Add its Reference No. and Description.
4. Choose Refund to save, then verify the remaining credit and cash account. This form records the bookkeeping event; it does not prove a provider has sent money.

Worked checks

These are illustrative accrual examples with no tax, fees, or inventory costs.

Original situation	Credit and refund	Expected result
$500 service invoice paid in full; $100 allowance refunded	$100 credit memo; $100 cash refund	Net sale $400, net cash retained $400, no remaining customer credit
$1,000 service invoice with $400 paid; entire sale canceled	$1,000 credit memo; $600 applied to the outstanding invoice; $400 refunded	Original invoice due $0, credit remaining $0, net sale and cash retained $0

The original receipt remains part of the audit trail. Do not delete a genuine historical payment to represent a later refund. With tax, stock, processor fees, or prior credits, reconcile those components separately before considering the return complete.