Refunds and credit notes in PrestaShop

Difference between a credit note and a refund

Everyone knows what a refund is: it's the return to the buyer of all or part of the amount paid for their order, for whatever reason, such as returning a product that doesn't suit them.

An accounting credit note is two things: a line in the accounts with a negative amount, reporting a refund AND a document (PDF with PrestaShop) looking just like an invoice, but also with negative amounts.

Example of a credit memo line in accounting (here AutoPresta), a negative line between two positive receipts:




Example of a PDF credit memo produced by PrestaShop:



When a customer buys and pays, we provide him with a paid invoice (positive amounts). When we reimburse him, we have to do three things:

• provide him with a credit note (PDF document) as an accounting record of the refund.
• refund the amount of the credit note to his bank account (or provide him with a voucher for the same amount, with his agreement).
• keep a copy of this credit note to record in your own accounts as proof of payment.

The customer who receives the monetary refund in his bank account, needs the credit note (document) as proof of the cash inflow. He will add in his accounting, in his expenditure register, a line with a negative amount, corresponding to the amount of this credit note.

Making a refund in PrestaShop

In PrestaShop, the simple term "refund" can mean very different things:

Changing the status of an order to "Refunded". This removes the amount from your balance, but does nothing else - no bank refund, no accounting credit generation, no stock increment... So limited usefulness and risk of accounting errors:

Actually refund the amount to your bank account. This is easy to do, for example, for orders paid via Paypal services (including CB payments without a Paypal account):

But this type of functionality doesn't exist with all payment methods and you often have to go to your bank's management site to make refunds for CB payments, for example.
Moreover, as you can see from the screenshot, this Paypal tool doesn't allow you to make partial refunds.

But above all, it's important to understand that making a monetary refund of an order isn't enough from an accounting point of view, you also need to provide the buyer with a credit note and keep a copy for your own accounting purposes.

Make a partial refund, with selection of products and amounts refunded.

In particular, this allows you to cleanly manage your stock (by re-incrementing the quantities of reimbursed products) and also to indicate from an accounting point of view reimbursed sums that may differ from the sums initially invoiced.
A big advantage of this method is that a credit note is automatically generated.



Then at the bottom of the page ...

1. For the 1st product, indicate the number refunded
2. Idem for each product
3. And the amount refunded (excl. tax)
4. If you're refunding all or part of the shipping costs, indicate the amount
5. If the customer has returned the products, tick here to put them back in stock
6. Aie aie aie, no don't tick this option if you intend to refund the customer, as you'd then be refunding them twice!
7. Options that are very unclear and don't seem to have any concrete effect...
8. Click to validate refund

What's next? :

1. The order details do show refunds, product by product
2. But the order total remains unchanged! And that's normal, we don't have the right, legally, to modify the amount of an order, or an invoice, after it's been paid.
3. Unless you've ticked "Generate a coupon", the customer doesn't get a refund, for him no difference. If you leave it at that, he won't be happy :-(

So what's the point of having generated this partial refund?

• It generated a credit note!
• It recorded a trace and explanation of this credit note, in the order details.
• It put your inventory back in order.

What's left to do?

1. Send the credit note to the customer (some versions of PS do this automatically) or tell them how to download it from their customer account
.
2. Print it for you, for your accounting, in addition to the invoice, and enter it in your revenue register (or let AutoPresta do it for you - see below )
3. And above all, reimburse the customer realistically if you haven't ticked "Generate a discount voucher".

Make a so-called standard refund, i.e. a full refund of the order

.

This is the same principle as for a partial refund, but simpler, because the products refunded, are refunded at their purchase value. The order changes to "Refunded" status. A credit note is generated on request.





Then...

1. Check off the products to be refunded.
2. Specify their number.
3. Check to generate a credit note (important).
4. If you check this option, please do not refund the customer, otherwise you will have refunded twice.
5. Include or exclude reimbursement of shipping costs.
6. Always so unclear and non-functional, leave as is.
7. Validate

As with the partial refund, make sure your customer receives the credit note, print it out for yourself, and proceed with the customer's bank refund if you haven't generated a coupon for them.

Where to find credit notes in PrestaShop?

1. Go to "Orders"
2. Then "Credit notes"
3. You can download credit notes, but only one at a time. To do so en masse, use AutoPresta, see below, or a dedicated module.

An annoying detail, by default product returns are not possible in PrestaShop. No return, no credit... no credit, no chocolate.

This is activated here with PS 1.6:




With PS 1.7, this is activated on the credit page.

Automatically import PrestaShop credit notes into AutoPresta 3 accounting book

This is one of the new features of version 3, AutoPresta can read, export and integrate PrestaShop-generated credit notes directly into your accounting, in the revenue book.

In the order reading tab, you'll find a new table with details of partial or standard refunds made in PrestaShop, for selected orders:






In the import options, you'll see a new "Refunds (credit notes) and discounts" drawer.
Check "Create credit memo line..." to export PS credit memos to the revenue book.
Note that we've removed the old option of modifying the order amount by subtracting the refund amount.





Result, credit notes imported into the revenue book, negative amounts, strictly in line with the amounts present in the PDF credit notes produced by PrestaShop. Credit memo lines can be recognized by their red color:

Print a batch of PDF credit notes in bulk

Note: currently functional only on PS 1.5 and P1.6. Coming soon for PS 1.7.

1. In AutoPresta, log in to your site and go to the orders tab.
2. Choose the period of your choice, here the last three months, and refresh the display to see the orders.
3. Select all orders.
4. Click on the "Credit notes" button.
5. If the credit notes have already been generated, you can just reread them, or ask to regenerate them.
6. All PDF credit notes are compiled in a single multi-page PDF that's easy to archive and print.

Note that you can do the same for invoices and delivery notes

Manually generate a refund line, in the form of a credit note, in the revenue book

1. Select the recipe line on which to make a refund
2. Click on the "Refund"
button.

This has the effect of:

1. Add a new line in the book, repeating the same data as the recipe, but in negative.
2. Open the credit memo editing window.
3. You can modify, replace all data, including modifying, adding or deleting detail lines.
4. Or totals directly.






Entering a refund or credit note received on an expense


In the same way, AutoPresta 3 makes it much easier than before to add credit memo lines to the purchase register.



1. Select the purchase you've been reimbursed for.
2. Click on "Refund"
3. A new expense line, but with negative amounts is added to the register.
4. You still have to modify the amounts if the refund was only partial, otherwise simply save and close the window.







Conclusions


If you follow these few tips, you'll have your accounting in tip-top shape and, above all, in compliance with the law. The solution, as you now know, is to keep the line intact and add a credit line!

If you're a self-employed entrepreneur, AutoPresta version 3 will make your bookkeeping even easier than before, by automatically importing a credit line from PrestaShop for all partially or fully refunded orders, and by allowing you to generate a pre-filled credit line for your refunded purchases with a single click.

.