Posting Refunds to a Separate Account

Setting name: Refunds Account (to track Refunds separately)

Where to find it: Setup - Xero, under Default settings

When you refund an order in Shopify, the app posts a credit note against the original invoice in Xero. It does not post a separate receive money transaction. This setting decides which accounts the lines on that credit note are coded to.

Your two options

Use original Sales / Revenue Account from Order credits each line back to the same account the matching invoice line used, so a refund reduces the account the sale was booked to. If you map products to their own Xero accounts, each refunded item goes back to its own account, and refunded shipping goes back to your shipping account. Your sales figures stay net of refunds, which is what you want if you track totals per product or per SKU.

Use a specific Refunds Account sends every credit note line to one account you nominate, and the original sales accounts are left alone. This is useful for tracking refunds separately to sales in your P&L.

How to change it

1. Go to Setup - Xero in the app.
2. Find Refunds Account (to track Refunds separately) under Default settings.
3. Choose the option you want.
4. If you chose Use a specific Refunds Account, pick the account underneath in Select Refunds Account.
5. Save your changes.

Your choice applies to refunds synced from then on. Credit notes already in Xero stay as they are.

If a refund has posted to an account you weren't expecting, email us at help@hyvelabs.co with your shop URL and the order number.