Applying Credits and Refunds

Overview

The word “refund” means two different things in the platform, and the two processes are in separate areas.

• Billing credit — a negative line on an invoice that reduces what the customer owes. This covers both refunding a specific charge and adding a goodwill credit.
• Payment refund — recording that money has physically left your business and been returned to the customer.

Most of the time you need a billing credit. You only need a payment refund when you are actually sending money back.

This guide shows you how to:

• Refund a charge that has already been billed
• Add a goodwill credit or manual adjustment
• Correct a recurring charge that was billed at the wrong amount
• Record money back to a customer
• Choose the right method for your situation

Quick Start

Refund a billed charge → Open the invoice > tick the charge > Refund Transactions

Add a goodwill credit → Open the Unsent invoice > Add menu > New Transaction > negative amount

Correct a recurring charge → Feature page > Actions menu > Change Recurring Charge

Send money back → Customer page > Actions menu > Payment > negative amount

Refunding a charge already on a bill

Use this when a customer was overcharged on a previous invoice and you want to create a matching credit.

Steps:

1. Open the invoice that contains the charge
2. Tick the Update box next to each charge you want to refund
3. Click Refund Transactions

What happens:

• A matching credit transaction appears on the customer’s Unsent invoice, ready for the next bill
• The original invoice is not changed, so you do not need to recreate it
• The credit transaction is linked to the original charge in the platform’s records

Example: A customer was overcharged £50 on their January invoice. Open the January invoice, tick the transaction, and click Refund Transactions. A £50 credit appears on the Unsent invoice and will be included on the next bill.

Partial refunds: If only part of a charge needs refunding — for example, one week of a monthly recurring charge — use the On or After and Before date fields to limit the refund to just that period.

Single transaction shortcut: To refund one transaction without opening the invoice, view the transaction directly and use Actions menu > Refund.

For full details, see Transactions.

Adding a goodwill credit or manual adjustment

Use this when the credit is not linked to any specific existing charge. This covers goodwill gestures, compensation payments, pricing corrections, and similar adjustments.

Steps:

1. Open the customer’s Unsent invoice
2. Click Add menu > New Transaction
3. Set the Transaction Type to Credit, Refund, or Manual Adjustment as appropriate
4. Enter a negative amount in the Transaction Value field (for example, -25.00 for a £25 credit)
5. Add a description in Transaction Notes so it is clear on the bill what the credit is for
6. Click Save

What happens:

• The credit appears on the Unsent invoice as a negative transaction
• It is included on the next bill, reducing the total amount due
• If the credit brings the balance below zero, the platform produces a credit note

Example: A customer reported a service disruption and you agreed to a £50 goodwill credit. Open their Unsent invoice, add a new transaction with a value of -50.00, set the type to Credit, and add a note such as “Goodwill credit — service disruption 15/01/2026”.

Getting the credit on the next bill

Credits land on the Unsent invoice and are picked up when the next invoice runs. If your billing runs in arrears (as most do), a credit dated this month may not appear until the following run.

To make sure the credit appears on the very next bill, set the Bill Date to a date in the previous month. For example, if your billing cut-off is the 1st of each month and you add a credit in February, set the Bill Date to 31 January. The credit is then picked up when the February invoice is produced.

See Transaction Date and Bill Date for more detail on how this works.

Correcting a recurring charge billed at the wrong amount

Use this when a recurring charge has been running at the wrong rate — for example, a price change applied at the wrong amount, or the wrong feature count — and you need to correct it for a period that has already been billed.

The Change Recurring Charge action handles this automatically. Set the correct charge and backdate the From Date to the start of the incorrect period. The platform calculates what was overbilled and creates the appropriate credits without you having to work out the amounts manually.

There are four ways the correction can be applied, depending on whether the invoice has been approved and how you want the credit to appear. The options range from a simple adjustment row on the next bill through to unapproving the original invoice and correcting it in place.

For the full decision guide and step-by-step instructions for each option, see Correcting Charges on an Already-Invoiced Period.

Note: The platform also generates credits automatically when you drop a feature with a drop date before charges have already been made, and when you use the Refund and Rebill action. If you see credit transactions appearing on the Unsent invoice after a feature change, these are the likely source.

Recording money back to a customer

Use this when you are actually returning money to the customer — for example, processing a bank transfer or card refund.

This is separate from the billing credit methods above. Those adjust what a customer owes on their next bill. This records that cash has left your business.

Steps:

1. Go to the customer’s account
2. Click Actions menu > Payment
3. Enter the amount as a negative number (for example, -50.00 to record a £50 refund)
4. Set the Payment Method to show how the money was returned
5. Add a reference in Our Reference or Customer’s Reference if needed
6. Click Save

What happens:

• The negative payment is recorded against the customer’s account
• Their balance adjusts to reflect the money returned
• The payment appears on their next bill as a payment line

Example: A customer overpaid £100 by bank transfer and you have returned the money. Go to their account, use Actions menu > Payment, enter -100.00, set the method to BACS, and save.

Important: This records the refund in the platform only. You still need to process the actual bank or card transaction through your payment provider.

For full details, see Working with Payments.

What happens to credits

Credits from any of the methods above land on the customer’s Unsent invoice as negative transactions. From there, you have two options.

Include on the next bill

Leave the credits on the Unsent invoice and they will be picked up when the next invoice runs. The credit lines reduce the total due on that bill.

This is the simplest approach and works for all types of credit. Note that if credits bring the total below zero, the resulting document is a statement, not a credit note, because it contains a mix of charges and credits.

Issue a standalone credit note

You can move credits onto a new invoice straight away and send it as a credit note, without waiting for the next billing run.

Steps:

1. View the customer’s Unsent invoice
2. Tick the Update boxes next to the credit transactions you want to include
3. Click Add to Invoice, select New Invoice from the drop-down, and click Add to Invoice
4. Fill in the invoice details and click Save
5. Approve and email it to the customer

Because the transactions are negative, the invoice total will be negative — this is the credit note.

HMRC requirement: A credit note must reference the original supply being credited. This means a standalone credit note can only contain credits that are refunds of specific charges — for example, credits created by Refund Transactions, Change Recurring Charge (backdated), or Drop Feature. These are linked to identifiable original charges and can legally stand alone as a credit note.

Generic credits such as goodwill adjustments and manual negative transactions are not tied to any original charge. They cannot be issued as a standalone credit note. They must appear as credit lines on the customer’s next regular invoice instead.

Which method should I use?