Process a Refund – SubscriptionFlow

Follow these steps to refund a paid invoice. This guide covers three cases:

Enter the Invoices module and select the paid invoice you want to refund.

Click the ‘Refund’ button from the detailed view. Intuitively, this will be visible for paid invoices only where a certain amount was charged.

Select whether you wish the refund to be external or electronic (online).

Then select the payment method the refund is returned to.

Scroll down to enter the amount you wish to refund. In this example let’s refund $9 out of the initial $12.36 payment received. Click ‘Proceed’.

Case 1: The Customer Wants a Refund ('No Charges Reverse')

(Full Payment Returned + Invoice Left Open/Due)

Choose ‘No Charges Reverse’ if you want to convert the invoice status from paid to due and return the payment you received from the customer. This applies to cases where the customer is billed & charged for a service but they want their money back. For example, in the case of an autocharge at the end of a free trial. The invoice will remain open for your accounting operations to recognize that this payment was reversed.

Proceed to refund the amount selected.

The invoice status is back to due.

Under the Refunds tab you can see that the refund has been processed. The transaction shows paid status.

Case 2: Wrong Invoice Generated ('All Charges Fully')

(Payment Refunded + Invoice Made Void)

Choose ‘All Charges Fully’ if you want to convert the invoice status from paid to void and return the payment you received from the customer. This applies to cases where the customer is invoiced & charged inaccurately.

Proceed to refund the amount selected.

The invoice status has changed from paid to void.

Under the Refunds tab you can see the payment was refunded.

If you click on the customer and enter their credit notes, you’ll see that the system allocates the same quantity refunded to the customer’s credit notes. These credit notes are allocated to settle this invoice within the system which smooths out any kinks in financial reporting caused by this invoice.

That is how to refund an invoice.

Case 3: Refund for Partially Used Subscription ('Unearned Charges Only’)

(Payment Refunded+ Invoice Left Due/Overdue)

In this case, the total refund is applied in the middle of the billing cycle. This means that the customer used a part of the subscription already. Credit notes are applied in the amount of unearned charges (overcharged) and the invoice is opened with a revised charge that reflects the period that the subscription was used. Let’s illustrate with an example.

Go to the Customers module and click on the invoice you wish to refund.

Click the Refund button.

Choose your refund type and proceed.

Select ‘Unearned Charges Only’.

A complete refund is issued i.e. $250 in this case. Click on the invoice to drill down.

The invoice status is changed from Paid to Overdue. The credit note amount corresponds to the portion of the total amount that was overcharged (i.e. unearned). The outstanding balance refers to the cost of the subscription used from when it was created to the day it was refunded. In this example, $246.58 was overcharged/unused, and $3.42 is now due for the period that the subscription was active between the activation and refund.

In this case, the customer has received a full $250 refund and has an open $3.42 invoice to clear.