Those located in Asia-Pacific will use the term Trust Account, where customers located in Europe will use the term Client Account. For more information on regional terminology, refer to this article.
When receiving funds back into the Trust Account from a Creditor paid in error, we'd suggest raising an Expense Credit Note with the same Chart of Account Code as the original Expense Invoice. This is particularly important where there is a Property Budget in use. If an Income Invoice is used to receive the funds instead of an Expense Credit Note, this will show as Income Received in your Property Budget.
To raise an Expense Credit Note, go to Income & Expenses > select at top-right New Expense Credit Note:
During the Allocation process, there is an option to Refund. Use this option, which will then allow you to receipt your returned funds against it. Then process an EFT payment for the amount.
If the 'Refund' option doesn't appear, then go back into the Expense Credit Note > use the 3 line menu > Allocate Credit Note > Refund and then reconcile to this Expense Credit Note.
Then process an EFT payment for the amount. It'll pull through into your Budgets, having a nullifying effect there as well as the Financial Reports (if the transactions happened in the same Close of Period, if not, it'll nullify across months).
Once the refund is completed, it will show as an unpresented deposit and when you reconcile, the refund will come up as 'gold coins'.