A refund is a return of money initiated by the merchant (business). However, the customer can also initiate a money return. This is called a dispute. Here is the current flow for a dispute in Stripe (it can vary in different platforms) with Synder Sync:
The end customer requests their money back initiating a dispute. The same moment Stripe withdraws the money. In Synder, you will see the transactions type “Adjustment”, which will create an “Expense” with a Deferred revenue account and a unique description in QuickBooks Online for the full amount of the payment.
Also Stripe takes a commission of $15 for reviewing a dispute (covered by the merchant).
Synced Expense for chargeback withdrawal in QBO
The business can see this in their Stripe account, where they have 2 options:
- To accept the dispute – then Stripe will give the money back to the customer, without charging the merchant in the books.
- To dispute and prove that money should be returned, submitting evidence that the charge was valid. Then Stripe reviews the case and makes the decision (within 90 days). Stripe may either:
– return the money to the end customer, which will not affect the merchants’ books as the money has already been withdrawn.
– return the money to the merchant. In this case, Synder will sync another “Adjustment” creating a “deposit” in QuickBooks Online to return the money to the Deferred revenue account. The recognition schedule will follow the adjustments.
Synced Deposit for chargeback reversal in QBO
Example of the recognition flow:
Stripe data flow:
October 12 – yearly invoice for $1200 was created and paid.
November 15 – the user initiated a chargeback (for $1200 as well).
Feb 3 – the chargeback was returned to the merchant ($1200).
Bookkeeping flow:
Let’s assume that for revenue recognition we use the monthly ratable method excluding last month. It means that for the $1200 invoice, $100 should be recognized each month.
When the chargeback happens, the recognition flow should be similar to refunds. The only difference is that chargebacks do not have product links.
Here is what the expected flow looks like:
| Period | Transaction | Account | Amount |
| Oct | Invoice Invoice Payment JE1 | AR Deferred Revenue AR Clearing Deferred Revenue Product Income | +1200 +1200 -1200 +1200 -100 +100 |
| Nov | Expense (on chargeback date) JE2 | Clearing Deferred Revenue (withdrawal) Stripe fees (dispute fee) Deferred Revenue Product income | -1215 -1200 -15 +100 -100 |
| Dec |  |  | 0 |
| Jan |  |  | 0 |
| Feb | Deposit (on reversal date) JE3 | Clearing Deferred revenue Deferred Revenue Product income | +1200 (debit) +1200 (credit) -500 500 |
| Mar | JE4 | Deferred Revenue Product income | -100 100 |
| Apr | JE5 | Deferred Revenue Product income | -100 100 |
| May | JE6 | Deferred Revenue Product income | -100 100 |
| Jun | JE7 | Deferred Revenue Product income | -100 100 |
| Jul | JE8 | Deferred Revenue Product income | -100 100 |
| Aug | JE9 | Deferred Revenue Product income | -100 100 |
| Sept | JE10 | Deferred Revenue Product income | -100 100 |
Notes for February
In February, the deposit returned all the money to the merchant, and we can see that the subscription is still active, so it should recognize all the missed periods: (Oct+Nov+Dec+Jan+Feb) in February, $100*5 = $500.
Then the recognition flow should go as usually ($100/mo).
This is what the revenue recognition schedule should look like:
| Period | Billed amount | Period Revenue | Recognized revenue balance | Deferred Revenue balance |
| October | 1200 | 100 | 100 | 1100 |
| November | -1200 | -100 | 0 | 0 |
| December | 0 | 0 | 0 | 0 |
| January | 0 | 0 | 0 | 0 |
| February | 1200 | 500 | 500 | 700 |
| Mar | 100 | 600 | 600 | |
| Apr | 100 | 700 | 500 | |
| May | 100 | 800 | 400 | |
| Jun | 100 | 900 | 300 | |
| Jul | 100 | 1000 | 200 | |
| Aug | 100 | 1100 | 100 | |
| Sep | 100 | 1200 | 0 |
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!