- Create a clearing account called “Loan: Clearing”
- Apply a payment to your Sales Adjustment Note using this account. This finalises the transaction by putting the money in a temporary holding place, a “clearing” account.
- Using the Customer Sale Invoice you wish to use this amount for apply a payment to it using the same “Loan:Clearing” account.
- The clearing accounting payments offset each other leaving it with a zero balance.
Additional
Why is it a Loan Account?
It’s a clearing account in this example becuase the money is really the Customers until you have applied it to another one of their outstanding Sales you have issued them. This may be different for different businesses so consult your Accounting Advisor for specific circumstances.
What if I don’t want to apply the refund to another invoice straight away?
In this circumstance you may want to leave the money in a more appropriate account such as “Loan: Refunds Payable” or similar.
