If your unit operates a self-supporting activity and if a customer asks for a refund, it is important to ensure that the refund payments are debited to the correct operating ledger account code. See below for a few tips on how to account for these situations:
- When refunding your customer, you should debit the refund payment to the same revenue account code that was used to record the original sale.
- For example, if you were selling registrations to an upcoming conference and credited the customer payments to a revenue account code such as 305300, Seminar and Conference Revenue, then any refunds issued back to those customers should be debited to that same revenue account code. That way, the initial deposit and the subsequent refund net to $0 within the same revenue account code.
- Another option would be to debit the refunds to the 308500, Other Refunds account code. This could be useful for units who would like to track refunds separately from the original revenue, so they can quickly see the total amount of refunds that were issued for a particular revenue-generating event when scanning the operating ledger.
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For further questions, refer to the Self-Supporting Funds section of UAFR’s Who to Ask list.
