Quick Fixes 32 – How to reconcile purchase invoice refund

Case 1: The Invoice Is Not Yet Paid

1. Go to Bills → Select the purchase invoice
2. Click “Bill Options” → Select “Add Credit Note”
3. Enter the refund amount ($132)
4. Xero will automatically reduce the bill amount
5. Pay only the remaining balance

Case 2: The Invoice Has Already Been Paid

📌 Steps to Record the Refund:
1. Go to Purchases Overview → Click “New Credit Note”
2. Enter supplier name and refund description
3. Enter quantity, unit price, and account category (same as the original invoice)
4. Click Approve

📌 Steps to Record the Refund Receipt:
5. Under Payments, record the refund received in your business bank account
6. Go to Bank Accounts → Open Reconcile tab
7. Find the $132 refund transaction
8. Xero should automatically match it with your credit note
9. Click OK to reconcile

I hope you found this tutorial helpful! You can watch a video tutorial below.

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