How to enter a refund from a supplier

This article explains how to record a refund from a supplier after you've paid a bill.

If the original cost was recorded by explaining a bank transaction rather than creating a bill, you’ll need to explain the refund as a bank transaction using the type 'Refund'.

If you've created a bill in FreeAgent and you're either not going to pay it in full or you're not going to pay it at all, you should net off the bill with a bill credit note.

The steps below outline how to record a refund for a paid bill in FreeAgent.

1. Enter a bill credit note

First, you’ll need to add a bill credit note for the amount of the refund by entering the figure for the line item as a negative amount. If there are more than one line items on the bill credit note, enter each one as a new line item and a negative amount.


2. Explain the money received from the supplier

Next, you’ll need to explain the refund from the supplier once the relevant bank transaction has been imported into your FreeAgent account via a bank feed or uploaded from a bank statement.

To do this, navigate to the 'Banking' tab at the top of the screen and select 'Bank Accounts' from the drop down menu.


Choose the relevant bank account from the list.


Select the transaction that relates to the refund.


Select ‘Bill Refund’ from the ‘Type’ drop-down menu and select the relevant bill credit note from the ‘Bill Refund’ drop-down menu.


Select ‘Explain Transaction’ to complete the process.

A record of the bank transaction being explained will appear in your Audit Trail report.


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