In WooCommerce, a refund takes two clicks. In your books, it must cancel all or part of the sale: sales, VAT and possibly shipping, on the same accounts as the original invoice.
The principle: reverse the invoice
The credit note mirrors the invoice with debit and credit swapped. The customer account is credited for the refunded amount; the sales, shipping and VAT accounts are debited. If the sale was split by product category, the refund follows the same split.
- Refunded sales are debited to the account of each line’s category.
- VAT is debited to the account of the original rate (or the destination country under OSS).
- A dedicated journal (OD by default) keeps credit notes apart from sales.
- A unique reference, such as AV-99-1042, lets you find the original invoice.
The “amount only” partial refund
A goodwill gesture of €20.00 entered without line detail says nothing about VAT. Treating it as a net amount would lose the VAT. The right method is to spread it pro rata over the original invoice’s composition: at 20% VAT, €20.00 including tax becomes €16.67 of sales and €3.33 of VAT, with rounding absorbed by the largest sale so the total matches the refunded amount exactly.
Date and period of the credit note
The credit note is dated on the refund, not on the order. A refund made in March on a January order appears in March’s export, without re-issuing the January invoice or payment. In practice, an export covers documents (invoices, payments, credit notes), each selected at its own date and locked separately.
What is left to do by hand
- The cash-out: the credit note credits the customer account, which stays in credit until the matching bank outflow, to be matched by your accountant.
- Gateway fees: if Stripe or PayPal refunds part of the fee to you, it is not carried on the credit note.
- Period order: a credit note is only exported once its order’s invoice has been exported; export periods in chronological order.
In Accounting Export for WooCommerce
Every WooCommerce refund becomes a credit note split like the invoice (category, VAT rate, OSS). An order moved to the “Refunded” status is still exported even if that status is not ticked: otherwise, regenerating a period would make the sale disappear while its credit note remains.
