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Tenant Refunds

A tenant refund is a "negative receivable" — it records money owed back to a tenant and posts the corresponding reversal entries to the ledger.

Approval establishes the obligation; it does not send money. Approved outstanding refunds can be paid through Process Payments, using the Tenant's Payment Means and the same batch lifecycle as Vendor payments.

When to Issue a Refund

Refunds are issued when a tenant has overpaid or is owed credit. Common scenarios:

  • Tenant overpaid rent and the excess needs to be returned
  • A charge was billed in error and the tenant has already paid
  • Move-out reconciliation results in a credit balance for the tenant

If refunding a previously paid receivable, a direct refund can only be initiated from a receivable that is Approved and Paid in full.

How Refunds Work

A refund is a Receivable with a negative net amount. Its charge accounts describe why money is owed back; approval posts those configured accounts. Returning rent generally reverses the original receivable's revenue entries:

  • DR Income/Revenue account for each charge item being refunded
  • CR Accounts Payable for the refund total

Security-deposit returns and other reimbursements retain their own configured charge accounts; not every Tenant payout reverses revenue. Processing the payment settles the approved obligation without changing that classification.

Example: 

Original receivable:    DR Accounts Receivable $1,200 / CR Rent Income $1,200
Tenant refund:          DR Rent Income $1,200 / CR Accounts Payable $1,200

Creating a Refund

From an Existing Receivable

Open a fully paid receivable and use the Refund action. Credence pre-populates the refund with the original receivable's details — lease, accounting period, and charge items — with amounts inverted to negative. Review and adjust as needed before saving.

Manually

Navigate to Tenant Refunds and add a new refund directly. Enter the lease, accounting period, and negative charge amounts.

You can also use Add Refund in More Actions on a Lease detail page. That selects the lease and its currency. The shortcut requires Receivable creation permission and creates a draft, not a payment.

Refund Lifecycle

Tenant refunds follow the same approval workflow as regular receivables.

  1. Draft — Saved but not posted to the ledger. Fully editable.
  2. Approve — Posts the reversal bundle to the ledger.
  3. Cancel — Reverses the refund's ledger entries if the refund was approved in error. For move-out refunds, cancellation also restores the selected security deposit and prepayment balances so the move-out can be processed again.

Paying an approved refund

Use Process Payment on an eligible refund or select it in Banking → Process Payments. Credence pays the full remaining net refund, including positive charge offsets and recorded settlements. It does not support arbitrary partial payouts or net different Receivables together. Existing partial settlements reduce the remainder.

Generation moves the refund to Payment in Transit. Confirming batch submission does not prove settlement; matching bank activity updates Partially Paid or Paid. A Processed batch can be cancelled with a reason and confirmation that it was not submitted. This retains history and restores eligible source payment statuses without reversing settlements.

For an outstanding payout that the bank will not process, authorized Receivable editors can use Mark Unpaid before retrying. This does not stop or recall a previous payment. Match any successful portion before processing the remainder; retrying an accepted but unmatched transfer can duplicate payment.