Account Credits and Liability Ledger Account

Account Credits and Liability Ledger Account

Account credits can be issued in one of two ways: 
  1. As a form of a refund reimbursement from an order
  2. An admin gives an account credit to the user

Applying an Account Credit as a Form of Refund Reimbursement from an Order

Example: Suzy purchases two $10 t-shirts online and then returns one of the shirts. 

The account administrator will need to process a return and edit Suzy’s order to show that the one shirt was returned, and apply an account credit to her contact record that can be used as a payment on a future purchase online.

Processing a Return
If someone accidentally buys more of an item than they meant to, or if they simply no longer want an item and would like to return it, Admins can remove the line item from order and issue a refund.

When issuing a refund on an order, it is VERY IMPORTANT that you follow these steps in this order!!
  1. Open the user's Contact Record and click on the Orders tab.
  2. Click on the Order Number.
  3. If the user ordered too many of something, use the edit icon to change the quantity.
  4. If the user no longer wants/needs the item, delete the line item by clicking on the red trash can icon.
  5. Once you do this the user will have an amount to refund.
  6. Then, you can click on the blue refund button and tell the system to apply an account credit to the user’s account to be used later.

Effects to accounting ledgers when an order is edited for a refund in the form of an account credit:

When the one of the t-shirts is removed from the order, the system posts the following entry:
  1. Decreases Spirit wear income by $10
  2. Increases Uncategorized Liability account by $10 
Once it is determined that Account Credit will be the refund method to be applied to the overpayment on the order, click on the blue refund button and select Account credit. The system will post the following entry:
  1. Decreases Uncategorized Liability account $10
  2. Increases Account Credit Liability account $10

An Admin Applies an Account Credit to a Contact Record

Example: Your organization has a cookie dough fundraiser in which students can earn an account credit amount based on level of sales.

Suzy qualifies for a $25 account credit.
  1. Go the user's Contact Record and click on the Directory & Account tab.
  2. To add the credit, click on the blue Add credit button to the far right.
  3. Amount to input will be a positive $25
  4. Student: use the drop-down list to choose a specific student to receive the credit amount
  5. Income & Expense ledger Account: Select the affected ledger account. Remember - in general, if you're granting a credit to the user (a positive number above), you need to select an Expense ledger account.
The transaction posted to the ledgers will be:
  1. Increase Account Credit Liability account $25
  2. Increase Cookie Dough Fundraising Expense $25
The Account Credit liability ledger balance shows the total amount that is currently listed as an account credit that has not been used or has not been refunded.


Removing an Account Credit

A person’s account credit can be removed in one of two ways:
  1. It is applied as a payment on a future order purchase
  2. It is removed by an administrator
Account Credit applied as a payment on a future order purchase:
Upon checkout for a future order, the system will notify the user they have an account credit and they will be asked if they would like to apply the account credit as payment towards the order.

This will:
  1. Increase related income for the SKU on the order.
  2. Decrease Account Credit on the person’s contact record and decrease the amount from the Account Credit ledger liability balance.

Account Credit removed by an Administrator:
If you would like to remove an account credit, you can do so from the contact record.
  1. Go to the user's Contact Record.
  2. Select the Directory and Account Tab
  3. Select "add credit."
  4. Enter a NEGATIVE amount to reduce the available credit. Remember - if you're removing a previous credit (a negative number above), you need to select an Income account.

Account Credit Report

The Account Credit liability ledger account tracks any credits for users that are currently in your database.

To see a listing of all family/and or student Account Credit Balances:
  1. Go to People > Reports > Account Credits.
If you are using the Accounting Tools, the Account Credit Report Balance should match the balance in the Account Credits Liability Ledger Account.







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