If you have received a refund for a purchase direct to your bank account the best way to allocate this transaction is to categorise the cash received to the same code where the original expense was incurred.

For example if the original expense was for Office Supplies and you have subsequently received a refund for this amount, then by classifying the refund to Office Supplies the impact of that transaction is countered.

Note: If you are VAT registered, ensure that the initial transaction, and the refund, have the same VAT rate allocated to them.

For information on how to categorise a transaction please see our separate article here.

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