Ask Me Anything! About Refunds!

[CShang]

Update! We are extending to the end of April! If you got some burning questions about Refunds (or maybe getting rid of credits) please feel free to submit your question(s) below.

Welcome to our first "Ask Me Anything" (AMA) event on Accounting topics, and the focus is on refunds!

Please submit your questions about refunds through this ServiceTitan Community Forum between April 10-12, 2023. We understand that refunds can be a complex and confusing topic, and whether you're curious about the technical aspects of refunds or looking for tips on how to handle refunds effectively, our Subject Matter Experts (SMEs) are here to answer as many questions as they can.

We are excited to see your questions and share our knowledge!

[sunshine207]

Refunds are a joke 😞 

[DiamondK1]

Yes... but the money/charge doesn't live on the newly created invoice so ServiceTitan won't allow me to issue a "refund" on the invoice. Now if ServiceTitan auto-created adjustment invoices on the old "charged" invoices to issue refunds, then that would make sense to me... but as it stands now it just confuses me because I can't issue a "refund" using the invoice ServiceTitan automatically creates. OR I'm missing something?

[DianaK]

It’s because when payment collections came out they removed the ability to apply negative payments to invoices. And that didn’t align with membership workflows. So now a part of membership refund workflow now is to create an adj invoice for the sake of applying this negative payment. Sorry for the inconvenience.

[DiamondK1]

Okay, just wanted to verify I wasn't missing something. Maybe someday down the line the invoice it creates for a refund on memberships will be useful 🤞 Until then I'll keep clearing it out, labeling it as a duplicate and manually creating adjustment invoices where the original charges/money lives 🙂 Thank you!

[CShang]

Thank you for submitting your question!

[DianaK]

What a pain, so sorry!

[DiamondK1]

Why does the deferred revenue memberships give you the option to "refund" the client at cancellation and will create an invoice to do so... but you can't issue a refund from the created invoice because the funds collected live on another (one or more) invoices? Am I missing something? This has baffled me since we started to use deferred revenue with our memberships.

#soconfused

[DianaK]

The "Refund" at cancellation takes into account any payments received (for example monthly billings) and creates one refund invoice. It moves the $$ from the Membership Liability account to the Income account and refunds from there.
The actual invoices go to the Membership Liability account and it's an accounting best practice to not issue refunds from a Liability account.

[mmontgom]

@rgoit67 In case you still had your questions this is the thread to ask it on!