Invoices: issuing credit notes and refunds
Sometimes things don’t go to plan with sales that you’ve invoiced to your clients.
Perhaps your client has not paid the invoice and is continuing to ignore your calls and emails so you make the decision that the invoice needs to be written off as a bad debt.
Or indeed you may have invoiced them but you and/or your client have decided you won’t be going ahead with their session and you need to cancel the invoice.
Or maybe, whilst your client has already paid you, you make the decision to refund the sale; it could be as a goodwill gesture or because you’re no longer able to deliver on the contract signed.
And sometimes the client changes their mind and even though they’ve already paid you they want to cancel part of their order.
So whilst the hit to your revenue is painful, you’ll be pleased to know that dealing with each of these scenarios is very straightforward! Light Blue will help you create a negative Sale Record (and Payment Record) for the amount to be credited or refunded; basically creating a negative income rather than an expense.
Let’s go through the different options and the steps you need to follow.
Issuing a credit note against an invoice
A credit note is issued in instances when no actual exchange of money takes place. However, rather than deleting the invoices that aren’t going to be paid a credit note is created; essentially a paper transaction to ‘balance the books’. This could be for a bad debt or where you’ve decided the invoice needs to be cancelled. NB. If your client has already paid part of the invoice you can still create a credit note for the balance.
- Go to the relevant invoice in the Sales section of Light Blue; the “Awaiting Payment” Quick Query should be useful here.
- Click “Issue Credit”.
- Click “Create” in the pop-up dialogue box.
- Light Blue will then create a new Sale Record for the negative value of the invoice (ie the credit) which is used to ‘pay’ the unpaid invoice.
Refunding the whole invoice
If the invoice is already paid but you decide to refund it; i.e. physically return the full cash amount back to your client, it’s a similarly simple process.
- Go to the relevant invoice in the Sales section of Light Blue.
- Click “Issue Refund”.
- Click “Create” in the pop-up dialogue box.
- Light Blue will then create a new Sale Record for the negative value of the invoice and mark it as paid as you’ll be paying the money back to your client; make sure you do this!
A partial refund of an invoice
If however you only want/need to refund part of an invoice that’s already been paid, there are a few more steps to go through.
- Go to the relevant invoice in the Sales section of Light Blue.
- In the example shown, the client has changed their mind and no longer wants the framed 18×12 print.
- Go to the Shoot Record linked to the invoice.
- In the Linked Records panel click on the green “+” and choose “New Sale” from the drop-down menu.
- Add the item to be refunded making sure you change the “Unit Price” to the negative value.
- Click “Done”.
- Click “Create Credit Note”. NB. In Light Blue, any negative sale is called a Credit Note.
- When you return the money to your client, click “Add Payment”.
- NB. If you’re refunding an arbitrary cash amount rather than a specific item from your price list, in the “New Sale” step above simply create a new line item describing what is being refunded making sure the “Unit Price” is a negative value.
Refunding online payments
If your client paid online via Stripe/PayPal/Square, follow the appropriate steps above to create the refund records within Light Blue.
Creating the refund records for an online payment does not automatically return your client’s money so you will still need to give it back to them.
Either log into your account of the service that they paid via and return the funds from there or use another method such as a direct bank transfer.