Vendor refunds

Record money a vendor pays back from unused vendor credit, an overpayment, or another refundable balance, into the bank or cash account you choose — never as revenue.

Plans: Core and above
Availability: Rolling out in prelaunch
For: Owners, Bookkeepers
In KontoCore: Purchases → Vendors → (vendor) → Record refund · also from a vendor credit or overpaid bill payment

In plain English

When a vendor sends money back instead of letting you use a credit, record it here so the credit closes and the cash lands in the right account.

What this does

A vendor refund must come from a real refundable source: an unused vendor credit, an overpayment on a bill payment, or another valid refundable vendor balance.

The amount cannot exceed the available refundable balance. The refund keeps a link to its source credit or payment.

Before you start

Confirm the vendor credit or overpayment exists and shows available balance.

How to

Record a refund

1Open the vendor (or the vendor credit / overpaid payment) and choose Record refund.
2Select the source and amount, up to the available balance.
3Choose the receiving bank or cash account, method (check, transfer, card, cash), date, and reference.
4Post. When the deposit imports in Banking, Match it to the refund.

Statuses and lifecycle

Status	Meaning
Posted	Cash recorded; refundable balance reduced.
Voided	Reversed; the refundable balance is available again.

Corrections, voids, and reversals

Void the refund to reverse it; the source credit or overpayment becomes refundable again.
Job-coded credits keep their job-cost effect from the original credit; the refund itself only moves cash and AP.

Audit trail

Every create, post, void, and reversal records the user, time, and reason, and links to the source record.
Each refund retains its source credit or payment for provenance.

Availability and provider notes

Built – unverified: this workflow exists in the prelaunch product but has not yet completed human certification. Review results before relying on them.
No external provider is required.

Permissions

Owners, administrators, and users with bookkeeping permission can create and post. View-only users can read but not change records.

What happens in your books

A vendor refunds $300 of unused credit:

Vendor refund · illustrative

Account	Debit	Credit
Checking	300.00
Accounts Payable (vendor credit)		300.00

Common mistakes

Recording the vendor’s check as income or as a negative expense.
Categorizing the bank deposit separately instead of matching it.

Troubleshooting

Refund option unavailable

The vendor has no unused credit or overpayment.

Amount rejected

It exceeds the available refundable balance.

Vendor creditsRecord credits from vendors for returns, rebates, or billing errors and apply them to open bills or record a vendor refund.Paying vendor billsSelect open vendor bills, apply vendor credits, choose how and when to pay, and record full or partial payments that clear accounts payable.Reviewing bank transactionsDecide whether each imported transaction is a new categorized record, a match to an existing record, or a transfer between your own accounts.Vendors, bills, and bill paymentsAdd vendors, enter bills with due dates, pay them, and apply vendor credits.

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Last reviewed October 6, 2026