Refunding or Crediting an Invoiced Item and Moving to Inventory

This article will guide you on refunding your client for an invoiced item and then moving the item into Inventory.

Overview

When refunding a client, the original item is to be left as is to keep a financial record of it. This means a clone of the original item and credit for the item is needed.

Follow the outline below to accomplish this.

Create the Credit Item

  1. Select Create Credit Invoice to generate a clone.
    1. Confirm that the price is correct on the credit item and is reflected as a negative.
    2. Use our article Creating a Credit Item.

Before:

After:

Credit/Refund the Client

  1. Place the credit item on the same invoice as the original item so the client has a record.
  2. Update your records by going to Money In and applying a negative payment to the credit item using the payment method Apply Payment To Items From Funds Available.
    1. This will increase the client's funds available by that credit amount, which can then be applied to an open balance item the client may have.   
  3. For a refund, follow the steps in our article Client Refund. Please note in the Money In section, payment will be applied to the credit item, not the original item. 

Clone the Original Item

  1. Select the original item and click clone at the bottom of the item details. This will create a copy of the item that you will later move into inventory.
    1. We recommend renaming this item with CLONE at the beginning of the description so it is easy to recognize.
  2. Add the clone to the same PO order as the original item. 

Record Payment for the Cloned Item

The same credit item that was created to refund the client can be utilized to pay for the cloned inventory item, as we will be using the purchasing side of this item.

  1. Confirm that the credit item purchase cost matches that of the original item.
  2. Place the credit item on the same PO as the original and cloned item.
  3. On the Purchase Order, select the Payment tab. Use Suspense as the From Account to pay the negative balance on the credit item and a positive on the cloned item. The total payment should net to 0.

Move Cloned Item to Inventory

Now that the cloned item has been paid, this item can be moved into inventory so that it can be received and sold to another client. If no inventory ID has been created for this item yet, you can do that during the move.

  1. Go to Projects > Items > select the applicable item.
    1. If you have not yet created an inventory ID for the item, enter one here and select the Move To New Inventory.
      large-move to
    2. If you have an existing inventory id you would like to add this item to, select the Inventory ID from the drop-down then select Move to Inventory
      large-move to 2
  2. Go to Projects > Inventory > Edit and click on the Receive tab to receive the item.
  3. Enter the vendor invoice (we recommend using the date if you do not have a vendor invoice number), enter the quantity that you have received, and save. This will recognize the inventory item as an asset and ready to be sold to another client through the Selling Inventory process.

This will mark the item as ready to be sold to another client through the Selling Inventory process.