Issuing Refunds Just Got Easier! ST-51 Refund Update

What's going on, everybody? It's Richard Kohberger here, the blue collar nerd. And in this video, we are going to be going over the new refunds workflow that is premiering with the ST51 release. So this new refunds workflow, it is optional, it is in your settings, and it's off by default. But basically what it does is it automates a lot of the tasks that need to happen in Service Titan when you issue a refund in order to keep your books accurate. So it can automatically apply negative refund tasks and negative payments where appropriate. So in order to set this up, first go to your settings and then search for payment collections. That's under the invoicing section of the settings. Now, payment collections is a feature that is a prerequisite to this. So if you are not using payment collections, you will have to turn that on first in order to use this feature. Now, under that section you'll see this new switch that says Automated Refunds workflow. And if you toggle that on, you get a few more fields to fill out. Now, the first thing we need to do is assign refunds price book tasks. So. So if you already have refund tasks in your price book, you can fill those out here. You just search for it within this box. Or if you don't already have a refund task in your price book, then you can click this link right here to use Service Titan defaults and it will make them for you. Now, there are two refund reasons to be filled in here. Customer complaint and billing error. If you're using the Service Titan default, it's going to make one task and use the same one for both. And that is pretty common to use the same one for both reasons. But if you wanted to separate them to keep even better track, you could do that too. Then you'll fill in the general ledger account that these tasks will map to. So typically it's recommended to have a dedicated refund income GL account. So we'll just fill that in right there. Okay, so that takes care of that. Now, those were the price book tasks and those tasks will get added to a new invoice to negate any work that was already done that we're refunding. Now, if we use a negative task to negate a task, then we're going to end up with AR with accounts receivable because it's going to take that task off, but the payment will still show. So at that point it looks like the customer overpaid during our refund process. And so to fix that, we also need negative payment types. So same deal here. If you already have negative payment types made, you can fill them in or you can click that link to use the service Titan defaults. Now for the credit card payment type, it's recommended to map that to a bank account gl so an asset gl. So that's what I'm going to do here. And for check it's recommended to tie that to a liability glass. Now I'm in a sample account with example data and this sample account happens to not have a liability GL account set up. So I'm just going to pick a different one. But. But don't do what I'm doing. Ideally you would have a refunds liability GL to tie that one to. All right, then we're going to hit save and that's it. We are all set up. So let me give you an example of how we issue a refund. So one place where you could issue a refund from is the invoice page. So next to an applied payment there should be this little circular arrow refund icon. And if you click on that you will get this fly out. So first you'll be asked to fill in the refund reason. Now it's important to pick the right reason here because they don't all do the same thing. For example, if you choose customer complaint on a completed job, that's both going to create a negative payment and it's going to create a new invoice with negative refund tasks because there's an invoice with tasks on them and we need to negate those tasks. Now however, if you choose, for example, deposit taken on a canceled job, that is only going to create a negative payment, it's not going to create a new invoice with negative tasks because there's no task to negate. We only collected a deposit. No work has been done yet. And that is of course, assuming you are collecting deposits as intended using the new payment collections. There's also an other option that you can pick and then write something in. Just know that if you do choose other, it's going to do what I just described with deposit taken on a canceled job. So it's going to create a negative payment, but. But it is not going to create a new invoice with a refund task on it. So if your other reason, whatever it is, does require you to use a negative refund task to negate some other task, then you will have to make that adjustment manually. And if you're Curious why here there are more refund reasons than we set up back in the settings. Well, that's because some of these refund reasons just don't require any additional setup. Because remember what we were setting up in the settings with the refund reasons was what task goes with it. So we didn't see, for example, deposit taken on a canceled job in the setup because we didn't have to set up any refund task with that. There is no refund task in that situation. Okay, so once we've chosen our refund reason, then we pick the refund amount. So we can either put in a specific amount and we can do that by either a flat dollar amount or by a percentage, or we can choose to tie the refund to specific items on the invoice. And again there we can choose to refund the entire task. We can choose to refund a specific AM or we can choose to refund a specific percentage. And then finally we need to choose our refund method. So here my choices are cut a check in the accounting software or process credit card refund outside of ServiceTitan. Now, it says that because I am in a sample account that is not tied to Service Titan Payments, if you are using Service Titan Payments, then you will have an option to process that entire credit card refund within ServiceTitan. And once we've got all that filled in, we're going to hit save. Once we do that, it's going to give us this overview of what it's about to do. So it tells us that it's going to be making a negative check payment in order to offset the original payment. And it lets us know that that is going to export into our accounting software as a journal entry. It also tells us that it's going to be creating a negative adjustment invoice with the refund task on it. It tells us what GL account that is mapped to and it tells us why it's doing that to reduce our revenue and accounts receivable. It also informs us that that will be exporting into our accounting software as a credit memo. So if we're good with all that, then we'll hit process refund and then we'll get this notification telling us that the transaction was successful and we'll see this refunded tag next to the payment on the invoice. Now, if I go back to the job and look on the job audit trail, I can see everything that just happened. And if I want to, I can also click into this invoice here with a negative Payment on it to go and check that out. So on this invoice I can see the negative task that was created and the negative payment. Now, if we need to refund a payment that's stored as a customer credit, meaning it is not applied to any invoice yet, just floating on the customer's account like deposits, for example, those refunds should be done from the customer page. So if you scroll down on the customer page, you should see the section called available credits, Assuming of course, the customer actually has credits on their account. If they don't, you won't see that section. So if, for example, I wanted to refund this customer credit right here, I, I would click on this three dot kebab menu here on the far right and then click Refund payment again. I'll get that fly out like we just saw. Although you'll notice this time there are fewer refund reasons available because this is a customer credit and so there's less possibilities. Less possibilities. Few fewer possibilities. Ah, I went to elementary school. Other than that though, same deal. We can choose to issue a full or partial refund. We can do that by a flat dollar amount or by a percentage add. And we'll need to pick our refund method. And once all that's done and saved, if we refresh the customer page back at the bottom in the available credit section, we can see a refunded tag next to that original payment as well as the negative payment right there underneath it. Now, I do want to reiterate, if it is a customer credit that you are trying to refund, make sure you do it from the customer page. And the reason for that is, okay, let's say a technician went out on a job and, and on that job they did a little bit of work and they collected money for that. So there's an invoice with tasks on it, but they also collected a deposit. If you now want to refund that deposit. But let's say you don't want to refund the tasks that the technician did that day. If you initiate the refund from the invoice, it's going to pull from all the applied payments first, meaning it's going to pull from those tasks that were completed that day before it touches any of the credit money. But in that scenario, that's not what you're trying to do. You're only trying to refund the credit money. So you would go to the customer page and refund it from that credit there. Now, do note that there are permissions associated with issuing refunds. So make sure that everybody who needs to be able to do it has the refund transaction permission enabled as well as the create payment refund permission. And of course, issuing refunds does have accounting implications, so it's recommended to only give those permissions to a limited number of people within your company, ideally a few people with some accounting know how. Something else good to know is that in this initial version of this new refund workflow, it doesn't handle sales tax super elegantly just yet. Although that is being worked on. So basically, if you're using sales tax in Servicetitan, how that works with this right now is the sales tax that you have set up gets applied on top of whatever number you put in as your refund number. So for example, let's say you were trying to refund 100 bucks and you know that your sales tax that you have set up is 7%. Well, well, you would have to subtract that out first so you would actually refund $93 is what you would enter into the field, and then that extra $7 would get added on automatically afterwards, which is admittedly a little annoying, but they are aware of that and working on something to handle sales tax better in the future. Anyways, that's all I got for today. Check out the description down below for more resources and information on this. Be sure to hit like if you liked the video and found it valuable, be sure to subscribe to Surface Titan's YouTube channel if you've not done that already and I'll catch you guys in the next one. Appreciate it. Peace.