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Quick Answer: Navigate to a paid invoice → click "Issue Refund" in Actions card → select line items → enter reason → create credit note. For Stripe payments, refund processes automatically. For cash/check, you must issue payment manually.

When You'd Use This

• Customer requests money back after payment received
• Service quality issues requiring partial or full refund
• Work not completed as originally agreed
• Overcharges or billing errors discovered
• Customer dissatisfaction requiring resolution

Before You Start

Requirements:

• Invoice must have PAID status (cannot refund DRAFT or SENT invoices)
• Only Owners and Admins can issue refunds
• For manual payments (cash/check), you must issue physical payment separately

What You'll Need:

• Reason for refund (10-500 characters, required for audit trail)
• Decision on full vs partial refund
• For Stripe payments: Nothing else (auto-processed)
• For manual payments: Company checkbook or cash

How It Works

Step 1: Navigate to Paid Invoice

1. Go to Invoices page (/dashboard/invoices)
2. Find the paid invoice needing refund
   • Use search bar (customer name or invoice number)
   • Filter by status: Paid
3. Click the invoice row to open detail page

Step 2: Open Refund Dialog

1. In the Actions card (right side on desktop, bottom on mobile)
2. Scroll to bottom section (after Preview PDF, Edit buttons)
3. Click "Issue Refund" button
   • Icon: ⛔ (ban symbol)
   • Description: "Create credit note for refund"

What you'll see:

• Dialog titled "Issue Refund (Credit Note)"
• Refund method selector (Online Refund / Manual Refund)
• List of all invoice line items with checkboxes
• Reason text field (required)

Step 3: Choose Refund Method

What is Refund Method?

The refund method determines how the customer receives their money:

• Online Refund (via Stripe): Automatic refund to customer's card/ACH - money arrives in 5-10 days with no extra work
• Manual Refund: You issue a check or cash payment yourself - requires manual action

How It Works:

1. System automatically selects the best option based on how customer paid:

   • If paid via Stripe → Online Refund selected by default
   • If paid via Cash/Check → Manual Refund selected by default

2. You can override the selection if needed (see warning below)

Refund Method Options:

Option 1: Online Refund (Stripe) - Recommended

When Available:

• ✅ Invoice was paid via Stripe (card or ACH)
• ✅ Payment has a Stripe payment intent ID

Benefits:

• ✅ Completely automatic - no manual work required
• ✅ Fast - customer receives money in 5-10 business days
• ✅ Secure - money goes back to original payment method
• ✅ Tracked - Stripe provides confirmation and tracking

Button Styling: Blue button with "Issue Online Refund" text

What Happens:

1. Click "Issue Online Refund" button
2. System processes refund via Stripe immediately
3. Customer receives email with confirmation
4. Money returns to customer's card/bank in 5-10 days
5. Invoice status updates to REFUNDED

Option 2: Manual Refund - Use Only When Necessary

When Required:

• ❌ Invoice was paid via Cash
• ❌ Invoice was paid via Check
• ❌ Stripe payment not available (older invoices)

What You Must Do:

1. Click "Create Credit Note" button (orange)
2. System creates credit note (documentation only)
3. YOU must manually issue payment:
   • Write company check, OR
   • Withdraw and hand-deliver cash
4. YOU must track payment:
   • Add note to invoice: "Check #1234 issued on [date]"
   • Get signature if handing cash to customer

Button Styling: Orange button with "Create Credit Note" text

⚠️ Action Required Alert: Orange banner warns you must issue manual payment

What Happens:

1. Click "Create Credit Note" button
2. System creates credit note with CN number
3. Customer receives email (but NOT money)
4. Invoice status updates to REFUNDED
5. You issue check/cash separately (not automated)

Switching from Online to Manual (Warning)

Why Switch?

• Customer prefers check instead of card refund
• Stripe payment failed or was disputed
• Business policy requires manual refunds

What Happens When You Switch:

1. Click "Manual Refund" radio button

2. ⚠️ Warning appears:

3. Orange "Action Required" alert appears

4. Button changes from blue "Issue Online Refund" to orange "Create Credit Note"

When to Ignore Warning:

• Customer specifically requested check payment
• Business has policy requiring manual refunds for accounting

When to Heed Warning:

• No good reason to switch (stick with online refund - it's easier!)
• Customer is okay with card refund (default)

Step 4: Select Line Items to Refund

Full Refund (entire invoice amount):

1. Leave all line items checked (default)
2. All services/materials will be credited
3. Credit Note Total shows full invoice amount (with negative sign)

Partial Refund (specific items only):

1. Uncheck line items you're NOT refunding
2. Keep checked only items you ARE refunding
3. Credit Note Total updates automatically
4. Only selected items appear on credit note

What Each Line Item Shows:

• Description (e.g., "HVAC System Installation")
• Quantity × Unit Price
• "Taxable" badge (if applicable)
• Line total (with tax calculated)

Example Scenarios:

Scenario A: Overcharge by $50

• Invoice has: Service ($200) + Materials ($100) = $300
• Materials were actually $50, not $100
• ✅ Uncheck "Service" line
• ✅ Keep "Materials" checked
• Edit materials unit price → NOT POSSIBLE
• ❌ Limitation: Must refund entire line item, cannot adjust amounts
• Workaround: Issue partial credit note for $50 manually via accounting

Scenario B: Service Not Completed

• Invoice has: Labor ($500) + Parts ($300) = $800
• Customer cancellation before work started
• ✅ Keep all items checked (full refund)
• Reason: "Customer requested cancellation before service"

Scenario C: Quality Issue on One Room

• Invoice has: Room 1 ($400) + Room 2 ($400) = $800
• Room 2 work needs redoing
• ✅ Uncheck "Room 1" line
• ✅ Keep "Room 2" checked
• Refund $400 for Room 2 only

Step 5: Enter Refund Reason

1. Click in "Reason for Credit Note" text field
2. Type detailed explanation (10-500 characters required)
3. Character counter shows at bottom (e.g., "45/500 characters")

Good Refund Reasons:

• ✅ "Customer dissatisfied with service quality, agreed to full refund"
• ✅ "Overcharged customer by $50 for materials not used"
• ✅ "Service not completed on time per agreement"
• ✅ "Work did not meet quality standards, customer requested refund"

Avoid Vague Reasons:

• ❌ "Refund"
• ❌ "Customer asked"
• ❌ "Error"

Why Required: Creates permanent audit trail for accounting and dispute resolution

Step 6: Review Credit Note Total

Before clicking "Create Credit Note":

1. Check Credit Note Total (purple card at bottom)
2. Amount shows with negative sign (e.g., -$540.00)
3. Shows number of line items selected (e.g., "2 line items selected")
4. Verify this matches expected refund amount

⚠️ Important: This is the EXACT amount that will be refunded (or documented for manual payment)

Step 7: Issue Refund

For Online Refunds (Stripe):

1. Verify button text: "Issue Online Refund" (blue button)
2. Click button once
3. Button shows "Processing refund..." while working
4. Wait for confirmation toast message

For Manual Refunds (Check/Cash):

1. Verify button text: "Create Credit Note" (orange button)
2. Click button once
3. Button shows "Creating Credit Note..." while working
4. Wait for confirmation toast message

Success Message:

• Toast notification: "Credit note CN-2026-0001 created successfully"
• Dialog closes automatically
• Invoice detail page refreshes

Step 8: Complete Manual Refund (If Applicable)

If you selected Manual Refund, you MUST complete these steps:

If Paid by CHECK:

1. Write company check for credit note amount
2. Payable to customer name
3. Memo line: "Refund for Invoice [INV-2026-XXXX], Credit Note CN-YYYY-NNNN"
4. Mail or hand-deliver check to customer
5. Record check number in invoice notes (for tracking)

If Paid by CASH:

1. Withdraw cash for credit note amount
2. Place in envelope with customer name
3. Include printed credit note copy
4. Hand-deliver to customer (get signature if possible)
5. Note delivery date in invoice notes

System Actions (Automatic):

• ✅ Credit note created with CN number
• ✅ Invoice status updates to REFUNDED
• ✅ Customer receives email with credit note (but NOT money)
• ✅ Credit note appears on invoice detail page

System Does NOT:

• ❌ Issue physical check
• ❌ Transfer cash
• ❌ Process bank refund

Important Rules

Full vs Partial Refunds

Full Refund:

• Refunds 100% of invoice amount
• All line items credited
• Simplest and most common

Partial Refund:

• Refunds selected line items only
• Useful for quality issues on subset of work
• Customer still paid for completed services

Limitation: Cannot refund partial amounts of a line item (e.g., 50% of one service). Must refund entire line item or nothing.

One Credit Note Per Invoice

• ✅ Can create ONE credit note per invoice
• ❌ Cannot create multiple credit notes for same invoice
• ❌ Cannot edit credit note after creation
• ❌ Cannot delete credit note

If you need multiple refunds: Create separate invoices for each refundable service upfront

Refund Method Selection

System automatically selects the best option:

When to Override (Switch to Manual):

• Customer specifically requests check instead of card refund
• Business policy requires manual refunds
• Accounting prefers manual tracking

Warning: System shows alert when switching from Online to Manual (you're creating extra work for yourself)

Invoice Status After Refund

• Before: PAID (green badge)
• After: REFUNDED (purple badge)
• Cannot change status back to PAID
• Cannot delete refunded invoices

Credit Note Numbering

• Format: CN-YYYY-NNNN
• Example: CN-2026-0001, CN-2026-0002, etc.
• Auto-increments per year (resets to 0001 each January 1)
• Unique across all tenants (your company only)

What Happens After

Immediate Changes

1. Invoice Detail Page:

   • Status badge changes to REFUNDED
   • "Issue Refund" button disappears (already refunded)
   • Credit Note section appears with CN number and details

2. Payments Page:

   • Payment still appears in list (shows refunded status)
   • Clicking payment opens invoice detail (shows refund info)

3. Customer Receives Email:

   • Subject: "Refund Issued for Invoice [INV-2026-XXXX]"
   • Credit note PDF attached
   • Explanation of refund reason
   • Expected timeline (if Stripe/card)

4. Accounting Records:

   • Credit note recorded in system
   • Negative entry created for reports
   • Audit trail with user, timestamp, reason

Timeline (Stripe/Card Payments)

• Immediately: Credit note created, email sent
• 1-3 business days: Refund appears in customer's bank as "pending"
• 5-10 business days: Money fully returned to customer's account
• 10-14 days: If still not received, customer should contact their bank

Timeline (Manual Payments)

• Immediately: Credit note created, email sent
• Your Timeline: Write and deliver check/cash ASAP
• 24-48 hours: Customer should receive manual payment
• If Delayed: Customer may follow up (check invoice notes for status)

Common Scenarios

Scenario 1: Customer Dissatisfied with Service Quality

Situation: HVAC repair completed, customer unhappy with results, paid $800 via Stripe.

Steps:

1. Review work with customer, agree on resolution
2. Navigate to invoice (INV-2026-0123)
3. Click "Issue Refund"
4. Leave all line items checked (full refund)
5. Reason: "Customer dissatisfied with service quality, full refund issued per owner approval"
6. Create credit note
7. Customer receives $800 back to card in 5-10 days

Outcome: Customer receives full refund automatically, relationship preserved.

Scenario 2: Partial Service Completed

Situation: Scheduled 3-room HVAC cleaning ($150/room = $450 total), only cleaned 2 rooms due to time, paid via check.

Steps:

1. Navigate to invoice (INV-2026-0124)
2. Click "Issue Refund"
3. Uncheck 2 completed rooms (keep 1 room checked)
4. Credit Note Total: -$150.00
5. Reason: "Third room not serviced due to scheduling issue, partial refund for 1 room"
6. Create credit note
7. ⚠️ Write company check for $150 (manual payment)
8. Add note: "Check #1234 mailed to customer on 1/30/2026"

Outcome: Customer refunded $150 via manual check, paid $300 for 2 completed rooms.

Scenario 3: Billing Error (Overcharged)

Situation: Accidentally charged $540 instead of $500 (tax calculation error), paid via Stripe.

Steps:

1. Navigate to invoice (INV-2026-0125)
2. ❌ Cannot issue $40 partial refund directly (line item limitation)
3. Workaround: Create new negative invoice or manual credit
4. Alternative: Issue full refund, create new correct invoice for $500

Best Practice: If error is recent (same day), void invoice and create new correct one instead of refunding.

Scenario 4: Customer Cancellation Before Service

Situation: Deposit paid $200 via card, customer cancels before scheduled date.

Steps:

1. Navigate to invoice (INV-2026-0126)
2. Check cancellation policy (refundable deposit?)
3. If refundable: Click "Issue Refund"
4. Keep deposit line item checked
5. Reason: "Customer cancelled appointment before scheduled date per refund policy"
6. Create credit note
7. Customer receives $200 back to card automatically

Outcome: Full deposit refunded, service never performed.

Mobile Tips

Touch Targets

• All buttons are minimum 44px height (easy to tap)
• "Issue Refund" button has clear icon and description
• Checkboxes are large and easy to toggle
• Reason text field expands on mobile for easy typing

Navigation

• Swipe down to close refund dialog
• Tap outside dialog to cancel (prompts confirmation)
• Use back button to return to invoice list after refund

Best Practices

• Use landscape mode for better view of line items table
• Zoom if needed to read line item descriptions clearly
• Double-check Credit Note Total before tapping Create

A: Yes! As of Feature 23, you can select the refund method:

• Online Refund (Stripe): Available if invoice was paid via Stripe - automatic refund to customer's card/bank
• Manual Refund: Available for all invoices - you issue check or cash yourself

System Defaults:

• Stripe payments → Online Refund selected (recommended)
• Cash/Check payments → Manual Refund selected (only option)

You can override the default and choose Manual Refund even if Online Refund is available (system will warn you).

When to choose Online Refund:

• ✅ Default for Stripe payments (easiest option)
• ✅ Customer is okay with card refund (most customers prefer this)
• ✅ You want automated processing (no manual work)

When to choose Manual Refund:

• ✅ Customer specifically requests check payment
• ✅ Business policy requires manual refunds
• ✅ Original payment was Cash/Check (only option)

Q: What if customer paid via Stripe but I want to refund via check?

A: You can now choose this! When issuing refund:

1. Open refund dialog
2. System defaults to "Online Refund" (blue button)
3. Click "Manual Refund" radio button
4. ⚠️ Warning appears explaining you'll need to issue check manually
5. Orange "Action Required" alert appears
6. Click orange "Create Credit Note" button
7. System creates credit note (documentation only)
8. You must write company check for refund amount
9. Add note to invoice: "Check #XXXX issued on [date] per customer request"

Why the warning? Online refund is faster and automatic. Only switch to manual if you have a good reason.

Q: Can I issue a partial refund of a single line item (e.g., 50% of one service)?

A: No. You can only refund entire line items. If you need to refund a partial amount, you have two options:

1. Split services into multiple line items when creating invoice (e.g., "Service - Room 1" and "Service - Room 2" as separate lines)
2. Issue full refund and create new correct invoice

Q: What if I issue a refund by mistake?

A: Credit notes cannot be deleted or edited. You have two options:

1. Create a new invoice to "reverse" the credit (re-bill customer)
2. Contact support for accounting adjustment

Best Practice: Always double-check Credit Note Total and reason before clicking "Create Credit Note"

Q: How long does a Stripe refund take?

A:

• Processing: Immediate (within seconds)
• Appears as pending: 1-3 business days
• Fully credited: 5-10 business days
• Depends on: Customer's bank processing times

If customer hasn't received refund after 10 business days, they should contact their bank.

Q: Can I issue a refund for an invoice paid months ago?

A: Yes, as long as:

• Invoice status is PAID
• No credit note exists yet (one per invoice)
• For Stripe: Within 180 days of original payment (Stripe limitation)
• For manual payments: No time limit (but document reason clearly)

Q: Does customer get notified about refund?

A: Yes, automatically:

• Email sent with credit note PDF attached
• Subject: "Refund Issued for Invoice [INV-2026-XXXX]"
• Includes: Credit note number, amount, reason, timeline
• For Stripe: Email explains 5-10 day timeline
• For manual: Email says check/cash will arrive separately

Q: Can I refund more than the original invoice amount?

A: No. Credit Note Total cannot exceed invoice total. If you need to pay customer extra (e.g., compensation), issue separate payment outside system or create standalone credit note (manual accounting).

Q: What happens to invoice if partially refunded?

A:

• Invoice status changes to REFUNDED (even if partial)
• Credit note section shows items credited
• Remaining balance is NOT tracked separately
• For reporting: Invoice shows original total, credit note shows negative amount

Q: Can technicians issue refunds?

A: No. Only Owners and Admins can issue refunds. Technicians do not have access to financial features including refunds, invoices, or payments.

Related Pages

Related Tasks

• Mark Invoice as Paid - Record payment received
• Send Invoice - Email invoices to customers
• View Invoice History - Track invoice changes

Related Features

• Invoices - Complete invoicing system guide
• Payments - Payment tracking and receipts
• Credit Notes - Understanding credit note accounting

By Role

• Owner's Guide - Financial management for business owners
• Admin Guide - Administrative tasks including refunds

Need more help? Contact support or check our complete help documentation.

Last Updated: February 1, 2026