When there is a refund, depending on your business preferences you may want to either just decrease the revenue or report your gross revenue and refunds separately. The guide below will explain how to set Synder Revenue Recognition to track refunds separately.
Overview:
Decrease revenue by the amount of refunds
By default, Synder RevRec will just decrease revenue by the amount of refunds, so Profit and Loss will show the revenue net of refunds.
Example:
Imagine that your customer paid a yearly invoice for $300 in August 2024. To make it simple, let’s assume that $100 was recognized as the revenue for January 2023 (regardless of the number of days). In September, a full refund was processed.
The revenue schedule will look like this:
We can see that the invoice recognition started in August and $100 was recognized. However, once the refund for the full amount was processed -$300, the revenue decreased by the recognized amount -$100 in September.
The table below shows all the transactions created in the books for this subscription. The product mapping is done in Revenue Recognition → Configurations.Â
So, let’s imagine that a Stripe product was mapped to the QuickBooks “3 months product” and to QuickBooks income account “Subscription revenue” in the RevRec Configurations in Synder. And the “3 months product” is linked to the “Deferred revenue” account in QuickBooks.
The synced transactions in the accounting platform synced will look like this:
| Period | Transaction type | Product | Account | Debit | Credit |
| August | Invoice | 3 months product | Deferred revenue | 300 | |
| Invoice | 3 months product | Accounts Receivable | 300 | ||
| Invoice payment | Accounts Receivable | 300 | |||
| Invoice payment | Stripe clearing | 300 | |||
| Journal Entry | Deferred revenue | 100 | |||
| Subscription revenue | 100 | ||||
| September | Refund | 3 months product | Stripe clearing | 300 | |
| Deferred revenue | 300 | ||||
| Journal Entry | Deferred revenue | 100 | |||
| Subscription revenue | 100 |
As a result:
The deferred revenue balance is $0.
The clearing account is $0.
The profit and loss shows $100 in August and -$100 in September, so the year-end revenue will be net of refunds.
Track refunds on a separate category
An alternative way of tracking refunds would be to track them in a separate category, so that your revenue shows gross income and refunds on separate categories. To do this, follow the steps below:
- Go to Synder Settings tab in the left-hand menu → Sales.
- Enable the Track refunds setting, which will only be available if you have revenue recognition enabled.
- Set the account for refunds tracking in the Refunds account field.
- Sync your subscription with a refund and enjoy the result.
Example:
Picture again that your customer paid a yearly invoice for $300 in August 2024. Let’s also assume that $100 was recognized as the revenue for January 2023 (regardless of the number of days). In September, a full refund was processed.
The revenue schedule will look in absolutely the same way as in the above example.
The table below shows all the transactions created in the books for this subscription. The product mapping is done in Revenue Recognition → Configurations.Â
So, let’s imagine that a Stripe product was mapped to the QuickBooks “3 months product” and to the QuickBooks income account “Subscription revenue” in the RevRec Configurations in Synder. And the “3 months product” is linked to the “Deferred revenue” account in QuickBooks.
The refunded amount is reflected on the account selected in Synder settings: “Refunds given”.
The synced transactions in the accounting platform synced will look like this:
| Period | Transaction type | Product | Account | Debit | Credit |
| August | Invoice | 3 months product | Deferred revenue | 300 | |
| Invoice | 3 months product | Accounts Receivable | 300 | ||
| Invoice payment | Accounts Receivable | 300 | |||
| Invoice payment | Stripe clearing | 300 | |||
| Journal Entry | Deferred revenue | 100 | |||
| Subscription revenue | 100 | ||||
| September | Refund | 3 months product | Stripe clearing | 300 | |
| Deferred revenue | 300 | ||||
| Journal Entry | Deferred revenue | 100 | |||
| Refunds given | 100 |
As a result:
The deferred revenue balance is $0.
The clearing account is $0.
The profit and loss shows $100 in the Subscription revenue category in August and -$100 in the Refunds given category in September, so the year-end revenue will be showing gross revenue and refunds in separate categories.
Reach out to the Synder team via online support chat, phone, or email with any questions you have – we’re always happy to help you!