[GNC] best accounting practice for refund

[John Griessen]

On 6/26/19 8:51 PM, Eric Rathhaus (general) via gnucash-user wrote:
> In the past I created a credit note under the special job and sent my client a check.  This year they want me to use the credit to offset invoices for subsequent work.  I like the idea of creating a credit note under the special filing fee job I use for these payments and then applying the credit against other invoices I issue but I’m not sure if it will work from an accounting standpoint.

Since you are dealing with government and could be audited, I would ask the customer to receive a check
as refund, then buy more services with another check of theirs so as to clearly document this for an audit trail.

But, if they really want you to hold money and pay current invoices with it, using the liabilities account made just for them 
seems sane and auditable.

On 7/3/19 12:15 AM, Eric Rathhaus (general) via gnucash-user wrote:
 > I back off all the transactions and put the credit note in the AR account, selected two invoices and the credit note , credit 
note reduced by that amount and the payments showed.  But I need to run another offset and the credit note no longer appears in 
the AR account.  The system moved it to a liabilities account and automatically opens the liabilities account when processing a 
payment for that company.  Is this how it should work?

Seems good.  If you pay the last of that liabilities account out and still need more to pay invoices, you can ignore the suggested 
account to pay from and then reprint the invoice with payments sown and send them that
to ask for a check for the remaining amount.