Dynamics 365 Business Central | Issuing Customer Refunds & Credit Memos

By: Carlos Lozano – Dynamics Business Central Lead Consultant

Bond Consulting Services (BCS) was recently approached by a leading provider of hardware maintenance and repair services to simplify their refund and rebate processes for clients within their Dynamics 365 Business Central instance. The company issues many refunds to customers on a monthly basis and desired a system for easily issuing refunds to customers rather than through vendors.

Initially, the hardware provider had to create a vendor each time they issued a refund which took extra time and effort out of their day. Business Central also enables users to submit refunds directly to customers through the Payment Journals module, which many users are unaware of.

If you want to issue a payment to a Customer, in your Business Central instance, create a Sales Credit Memo for the Amount to refund and use the Payment Journals to issues a check.

First, open the Sales Credit Memo module in Business Central, select the Customer, the G/L Account, change the Description and type in “1” in the Quantity and the Amount to refund. After filling out the required fields, you can quickly post the Credit Memo for the specific company.

Then open the Payment Journals. Instead of selecting Vendor as the default “Account Type”, select “Customer”, the “Customer No.” and select Refund as the “Document Type”. Do not populate “Document No.”  if you are printing a Check; the system will automatically generate it.

In “Applies-to Doc. Type”, select Credit Memo, and in “Applies-to Doc. No.” select the appropriate Credit Memo for that Customer. The Amount field will be populated with the Amount entered for the Credit Memo. Lastly, if you are issuing a Computer Check, in “Bank Payment Type”, select “Computer Check”.

To print the Check, click on “Check” and “Print Check”, the system will automatically issue a check to the Customer that is the same as issuing a check to a vendor.

Once you have completed the steps to print the Check, post the Journal, you can go back to your Customer Ledger Entries and see the issued credit memo and refund in the Ledger.

This process of issuing a Refund and Credit Memo directly to a customer eliminates the need to create a vendor for individualized refunds, saving you time, manual effort, and expensive employee costs. The system automatically updates to reflect the payments, so they have an end-to-end view of the customer journey. Creating a customer refund is a default functionality in Business Central that can be completed by any user with access to the Payment Journals and issuing credit memos.

To learn more about the powerful capabilities of Dynamics 365 Business Central, please contact our BCS Team at (562) 988-3451 or schedule a free consultation!