Canceling a prepaid order: correct refund of money and goods

Order processing modes («Customer Order for a Product» and «Trade with Invoice») are key for stores that work with deferred shipment or make products to order. 

These modes allow you to accept an advance payment from the customer, reserve goods in the warehouse, or move them to a temporary storage warehouse until full payment and handover. 

However, entrepreneurs often face a problem: when a customer refuses the entire order or part of it, simply deleting the document or canceling the sale leads to chaos in accounting. Goods may get «stuck» in reserve or in a virtual warehouse, the cash register amount no longer matches the actual amount, and the customer balance shows an incorrect debt or overpayment. The main difficulty is that in such orders, the movement of money and the movement of goods are separated in time and documents, so cancellation requires a clear sequence of actions: money must be returned with a separate financial document, while goods must be removed from reserve manually or through special statuses.

Below is a complete step-by-step algorithm for correctly canceling an order with prepayment.

1. The basic rule: money separately, goods separately

In the Torgsoft accounting system, prepayment is recorded by a financial document, while reserve or shipment is recorded by a warehouse document. Therefore, simply deleting an order or invoice does not automatically return money from the cash register to the customer. Cancellation always consists of two parallel processes:

1. Releasing the goods: removing them from reserve or returning them from the temporary warehouse to the main warehouse.

2. Refunding the money, meaning the advance payment, to the customer.

2. Working with goods: correct removal from reserve

Depending on which mode you used, the goods may be simply reserved or physically moved to the «Temporary Storage Warehouse», also known as the goods held as collateral warehouse.

• Manual removal from reserve (Trade with Invoice). If the goods were simply reserved against an invoice, when canceling the order the reserved goods do not always automatically return to free stock in the warehouse; often this must be done manually. To do this, go to the «Reserve» tab, select the relevant goods, and remove them from reserve.

• Return from the temporary warehouse (Customer Order for a Product). If the order is fully canceled in the «Active» or «Editing a Closed Order» status, the program automatically creates an internal transfer invoice and returns the goods from the temporary storage warehouse to the main warehouse from which they were taken.

• Partial cancellation: the «Close» button. If the order was issued to the customer only partially, for example, the customer took one item out of three and refused the others, it cannot simply be deleted. For such cases, the «Customer Orders» form in Sales has the «Close» button. When it is clicked, all goods that remain in the temporary storage warehouse are automatically returned to the main accounting center, and the order receives the «Completed» status.

3. Working with money: refunding the prepayment

The money that the customer paid as an advance must be returned through a special action so that it is correctly written off from your cash register or current account.

• How to refund the money? In the order processing mode, use the «Prepayment Refund» button. The «Refund Money for Goods» window will open, where you need to click «Money Refunded».

• Refund amount. The prepayment can be refunded in full, if the order is canceled completely, or partially. A partial refund is calculated using the formula:

Prepayment amount minus the amount of goods already shipped.

• Choosing the source of funds. Funds must be returned in the same form in which the payment was made: in cash — from the cash register, cashless — to the customer’s card or current account. If the prepayment was made to a current account, be sure to select «Additional», choose «Return everything from the current account», and specify the required account. If you select «Return in the same form in which the payment was made», the program will automatically return the funds in the corresponding form, either in cash or cashless.

4. The trap of editing an active order

One of the most common problems occurs when the customer has made a 100% prepayment, the order has become «Active», and then the customer decides to refuse one of the items in the list.

If you simply switch the order to editing mode and delete one item, the total order amount will decrease, but the amount of the prepayment already made will remain unchanged, and will now exceed the order value. In this case, the program will block the issue of goods and display the error: «The prepayment amount being used must be within the range...».

 The correct solution: before issuing the remaining part of the order, you must perform the «Prepayment Refund» action for the amount of the item the customer refused. Only after you return the «extra» advance payment to the customer will the issue of goods for this order be unblocked. When partially closing an order using the «Close» button, the program will also check whether there is an unused prepayment balance and offer to refund it.

5. Canceling a prepayment and software ECR (PECR)

If, when receiving the advance payment, you printed a fiscal receipt for the prepayment, the cancellation process must include fiscal actions.

• According to the rules for working with PECR, if the customer refuses the goods, the entrepreneur must cancel the entire chain of receipts created for this transaction.

• Be sure to select the «Print Return Receipt» checkbox in the refund window so that the receipt is sent to the tax authority and the advance amount is written off from your fiscal balance.

Summary

To avoid negative stock balances, «eternal» reserves, and cash register shortages when canceling orders with prepayment, always follow this sequence:

1. Reduce the quantity of goods in the order or fully close/cancel it to release the warehouse stock.

2. Be sure to create a financial document for the prepayment refund, either in full or for the difference, choosing the correct cash register or account.

3. If the prepayment was fiscalized, print a fiscal return receipt.