How do I issue a refund for returned goods?

A refund for goods returned to you by the customer can be issued in the form of credit notes.

If you’ve enabled inventory tracking for your items in Zoho Books, you can raise a credit note towards an item returned by a customer; the stock level for this item will be adjusted accordingly.

A Credit Note can be created for the refund considering the following cases.

1. When the Invoice is Unpaid

When a customer partially or fully returns the goods you’ve supplied, before making any payments for the sale, you can create a credit note accordingly. Here’s how:

• Scroll down to the Sales module from the left sidebar, and open the Invoices.
• Open the corresponding invoice for which you wish to record the return of goods.
• Click the More icon and then click Create Credit Note.
• This will re-direct you to the credit note page.
• Under item details, specify the exact quantity that has been returned and create the credit note.

When a credit note is created for an unpaid invoice, the stock is returned to inventory, the status of the invoice will be marked as paid or partially paid based on the quantity / value returned and status of the credit note will change to closed. This is because the “credits” present in the credit note, will get applied to the invoice automatically, thus reducing the value of the invoice.

2. When the Invoice is Paid

When the invoice is already paid by the customer and the customer returns the goods, you can follow the same steps to create a credit note as mentioned before and then record the refund for the credit note.

• Go to the Sales module and click Credit Notes.
• Select the credit note you want to refund.
• Click the More icon and then click Refund.
• Enter the amount to refund and the cash/ bank account from which to refund.
• Click Save.