Tagging and processing Refunds on Stripe

I use stripe to process payment which gets transferred to my bank on weekly rolling period and lump all my payments on monthly basis.

However within this period i might have items returned by customers for refund.

When i issue a refund and there is credit balance on my stripe account, stripe will refund the customer from the balance but if there is no credit balance stripe will debit my bank account for the refund value.

Please how do i tag and process these refunds


If you refund a customer, you can just do as you normally would but use the Stripe Holding Account as the source of the payment rather than your current account (or whatever bank account you normally use). The overall balance should then reflect what Stripe is currently holding for you.

So you would have, let’s say £20 from Customer A, and £30 from Customer B.

  • £20 in from Customer A, balance = £20
  • £30 in from Customer B, balance = £50
  • £20 refund to Customer A, balance = £30
  • Withdrawal to main account of £30, balance = £0

Let’s say in the above example, the withdrawal happened prior to the refund. In this scenario, your Stripe Holding Account balance becomes ‘overdrawn’, showing you owe Stripe money. When the next payment comes in, it will balance itself out.

I hope that helps, but please feel free to ask further questions.

So when i click on tag > refund to customer, on the box labelled “allocate to a client” do i just put in stripe as the client or the actual customer details? bearing in mind that i am processing the payment on monthly basis and not as individual customer payments.

If you’re bulking your sales as one client (e.g. ‘Monthly Sales’, ‘Shop Sales’ or ‘Stripe Sales’), then you would allocate it to that particular client and select the invoice that you wish to allocate it against. It would be the original client that the sales invoice would have been raised for.

You may find it easier to go to the invoice for that particular month that you want to record the refund against, and click More Options >> Raise a Credit Note. Once you’ve entered all the details, it will prompt you what you want to do with the value -

  • Hold it on the client’s account
  • or refund it to a bank account

In this case, you would refund it back to the Stripe Holding Account.

thanks a lot, i’m absolutely chuffed with your fast reponse

1 Like

No problem! We try our best :wink:

Please let us know if you have any further queries.

Please how do i record debt repayment, i borrowed money from a friend for the business and have made some repayment back during the tax year ended 5th april 2016

How was it lent to the business? Was it direct, or was it to the director and the director put it in?

If it was directly lent to the business, then you would normally set up a loan account. These posts explain it in some more detail:

If it was lent to the director as a “personal loan”, and then the director put it into the business, it would be treated as a transfer from the Director’s loan account. You would simply tag the repayments as a transfer back to that bank account to show it as repaid.

Thanks for your response, the money was directly lent to the business when it started in 2013-2014 tax year and i didn’t create any loan account for it.

I’m guessing ive messed up big time, can i still create a loan account and record this?
Do i need to do any adjustment on my previous years tax returns?

You can still create a loan account for it - that’s not a problem. However, I would recommend just running it past your accountant (I’m not one) just to make sure it’s correct in your situation. They should be able to advise you how to record this.

There are accountants who use our forums too, so they may be able to help you further.

Thanks, any accountants here able to give more insight please?