[GNC] best accounting practice for refund

[Geert Janssens]

As guess as to what might have happened:
When you select the invoice and credit note in the payment window, gnucash 
will automatically calculate the difference between them and set the payment 
or refund field to that amount. That is, it assumes you intend to fully "pay" 
for all the documents selected so far.
If you then just hit ok, it will create a payment or refund split for the 
difference amount to the account that was still selected as transfer account 
(which presumably was your liabilities account as gnucash remembers the last 
transfer account from a previous transaction).

If on the other hand you only want to use part of the credit note to pay the 
invoice, you have to tweak the fields in the lower half of the payment window. 
I think in your particular case you want to change the amount (payment or 
refund) to zero before clicking Ok.

Moving the split back to A/R is not a good idea in this case. It will probably 
confuse matters more. From what I understand your payment transaction will 
have three splits:
- One for the full invoice amount (in AR)
- One for the full credit note amount (in AR)
- One for the offsetting payment (in Liabilities)

The payment procedure as I describe it above on the other hand will only have 
result in two splits:
- One for the full invoice amount (in AR)
- One for the credit note amount offsetting the invoice (in AR)

So you could manually correct your payment transaction by
- Deleting the offsetting payment split
- Change the credit note split to be exactly the offset of the invoice

Regards,

Geert

Op donderdag 4 juli 2019 07:04:03 CEST schreef Eric Rathhaus (general) via 
gnucash-user:
> So I did assign the credit note to the AR account and then processed two
> payments by selecting the posted invoices and the credit note all in the AR
> account.  I didn’t do anything else but somehow the remaining balance of
> the credit note ended up in a liability account. Should I just move it back
> to the AR account to keep it simple?
> > On Jul 3, 2019, at 10:58 AM, Adrien Monteleone
> > <adrien.monteleone at lusfiber.net> wrote:
> > 
> > If you didn’t involve a liability account initially, the remaining credit
> > on the credit note would sit in AR. But if you ‘paid’ the credit note
> > with a liability, you transferred that amount from AR to the liability,
> > which is the account you will ‘pay’ future invoices from when offsetting
> > with the credit.
> > 
> > Be mindful that the credit note should have been posted to AR initially.
> > 
> > Also that the credit note’s line items should have all been assigned to
> > some income account, NOT a liability account. You want to decrease your
> > income accounts with a credit note that the original invoice(s)
> > increased. Not sure I follow u here. The first transaction was an invoice
> > and payment to the business checking account. Now part of that payment is
> > the credit note.  I assumed that paying the invoices in the AR account
> > with the credit note is a reduction of an income account.
> > 
> > Here’s a simplified transaction walk through:
> > 
> > 
> > Original Invoice
> > -----
> > Dr. Accounts Receivable		$1000
> > 
> > 	Cr. Income			$1000
> > 
> > Original Payment by check
> > -----
> > Dr. Undeposited funds		$1000
> > 
> > 	Cr. Accounts Receivable		$1000
> > 
> > Depositing of check
> > -----
> > Dr. Checking			$1000
> > 
> > 	Cr. Undeposited Funds		$1000
> > 
> > Issuance of Credit Note
> > -----
> > Dr. Income			$100
> > 
> > 	Cr. Accounts Receivable		$100
> > 
> > IF you ‘pay’ (transfer) the credit note with a liability account
> > -----
> > Dr. Accounts Receivable		$100
> > 
> > 	Cr. Customer Deposits		$100
> > 
> > When you offset a future invoice with the liability
> > -----
> > Dr. Customer Deposits		$100
> > 
> > 	Cr. Accounts Receivable		$100
> > 
> > OR if you don’t involve a liability account at all, offsetting a future
> > invoice -----
> > Dr. Accounts Receivable		$100
> > 
> > 	Cr. Accounts Receivable		$100
> > 
> > (in this case the money doesn’t move accounts, but gets ‘assigned’ to a
> > different document, from the credit note to the invoice)
> > 
> > Regards,
> > Adrien
> > 
> >> On Jul 3, 2019, at 12:15 AM, Eric Rathhaus (general)
> >> <rathhaus_law at yahoo.com> wrote:
> >> 
> >> Hi again - so everything worked the first time.  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?> 
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