Reimbursement for Paypal Using a Cheque

by Karen
(Montreal, Quebec, Canada)

Recording a Customer Refund

Recording a Customer Refund

The company that I have started to do bookkeeping for uses PayPal and cheques for payment of services. They are a non-profit fine arts centre that offer classes for children.

They have now on two occasions refunded students who originally paid for a class by PayPal using a cheque instead of using PayPal to reimburse.

I am not sure how to make the payment in Simply Accounting? They now know they need to learn how to reimburse in PayPal but in the meantime, how do I account for these cheques? What account do I use? Is it an expense?

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Hi Karen,

Refunds are usually set up in your chart of accounts as a contra account to your sales account, not as an expense account.

Once you have your account setup, create a credit memo that adjusts the students' accounts receivable balance, then let your accounting software payout the credit/refund rather than leaving it as an overpayment.

If you Bing/Google "How to refund a customer in Simply Accounting?", you will find instructions. I use QuickBooks so am unable to assist you with Simply Accounting.

I know in QuickBooks, another option is to write the cheque and code it to Accounts Receivable, then go to Receive Payments and apply the credit to the students' accounts.

As you know, refunding in PayPal is very easy; much less work than writing out a cheque.

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