Overview

When a payment processed through AR Automation (Sola) requires a refund, the process spans both the Sola portal and Accounting Seed. The steps you take in Accounting Seed depend on whether the original Cash Receipt is applied and whether the accounting period is still open. Use this guide to process the refund in Sola, determine the correct path for your situation, and make the required Journal Entry adjustment.  An optional worksheet is attached for use when a different team handles Journal Entries and Bank Reconciliation.

In This Article

• Step 1: Process the Refund in Sola
• Step 2: Determine Your Path in Accounting Seed
  • Path A: Cash Receipt Refund
  • Path B: Credit Memo + Refund
• Step 3: Adjust the Journal Entry

Before You Begin

Important:

• This process applies only to payments in a closed Sola batch. If the batch is still open, void the payment instead of refunding it. See Void an AR Automation Payment for instructions. Attempting to refund a payment on an open batch may produce incorrect transaction records in Sola.
• Cash Receipts with Prepayment Pending checked cannot be refunded. If you attempt to refund one, the system displays: "You cannot refund this prepayment cash receipt because it is awaiting payment." Wait until the customer's payment is received and the Cash Receipt posts before processing a refund.
• If different teams handle AR and Journal Entries/Bank Reconciliation, you can use the optional worksheet attached at the bottom of this article so AR can provide details

Step 1: Process the Refund in Sola

1. Log in to the Sola Portal and navigate to the Transactions tab.
2. Locate the transaction to refund.
3. Click the transaction. A menu appears on the right.
   1. 
4. Click the button with three lines at the bottom of the menu panel, then select Refund.
5. In the pop-up window, enter the refund details. Note:
   • For Credit cards, a full or partial refund is allowed.
   • For ACH, only a full refund is allowed.
   • Note: The customer's contact email from the original transaction displays; you can choose to send the receipt to them by checking "Send receipt".
   • 
6. Click Refund.
7. After processing, check the Transaction tab and record the refund processing fee shown. You will need this amount when adjusting the Journal Entry in Step 3.

Step 2: Determine Your Path in Accounting Seed

Use the table below to identify which path applies to your situation, then follow the instructions for that path.

Path A: Cash Receipt Refund

Use this path when the original Cash Receipt is unapplied (or after unapplying it). The accounting period must be open.

1. Navigate to the original Cash Receipt record in Accounting Seed.
2. Click Refund. (If you do not see the Refund button, confirm that the button has been added to the Cash Receipt page layout by your Salesforce Administrator.)
3. In the refund dialog, complete the following fields:
   • GL Account: Select your Clearing Account.
   • Amount: You cannot refund more than the CR amount. If convenience fees were collected, they cannot be included in the CR Refund; you'll receive a validation error. The convenience fee is handled separately through the Journal Entry adjustment in Step 3.
4. Click Save.
5. Proceed to Step 3: Adjust the Journal Entry.

Path B: Credit Memo + Refund

Use this path when the Cash Receipt is applied and the accounting period is closed.

1. Create a Credit Memo: find the original Billing, then click the Clone w/Lines button and on the interim screen check the Clone as Credit Memo checkbox then click Clone Billing. Adjust the credit memo lines as needed.
2. Click Refund on the Credit Memo record. (If you do not see the Refund button, confirm that the button has been added to the Billing page layout by your Salesforce Administrator.)
3. In the refund dialog, complete the following fields:
   • GL Account: Select your Clearing Account.
   • Amount: Enter the full refund amount (invoice amount plus the convenience fee, if the convenience fee was refunded to the customer).
4. Click Save.
5. Proceed to Step 3: Adjust the Journal Entry.

Step 3: Adjust the Journal Entry

Note: Depending on your organization's structure, the Journal Entry adjustment may be completed by a different team member than the person who completed Steps 1 and 2. If you are responsible only for the JE adjustment, begin here after receiving the refund details from AR.

Before You Begin

• The accounting period for the original batch Journal Entry must be open.
• Have the refund processing fee amount from Step 1 available before proceeding.
• Note these definitions: The convenience fee is the fee charged to the customer at the time of payment. The refund processing fee is the fee charged to your organization by the payment processor when a refund is issued. These are two separate amounts.

Steps to Adjust the JE:

1. Navigate to the automated JE for the batch that included the refund.
2. If the Journal Entry is posted, Unpost it before editing.
3. Adjust the following lines for all refunds:

4. If the convenience fee was collected and refunded to the customer, also adjust the following. If the convenience fee was not refunded, skip this.

6. Verify the Journal Entry balances (Total Debits = Total Credits).
7. Post the Journal Entry.
8. Confirm the Bank GL Line matches the actual deposit for bank matching.

Optional: Worksheet to Document Refund

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