Two terms that should not be confused
A reversal restores the effect of a transaction that did not reach finality or resolves a contradictory financial outcome. A refund is a new action linked to a successful payment that returns part or all of the value under policy and authority. Both need a clear reference, but their reason, timing, and accounting effect differ.
The correct refund flow
- Open the original transaction instead of creating a separate transfer.
- Verify refundable amount and currency.
- Record a professional, non-sensitive reason.
- Apply approval when amount or role exceeds the limit.
- Follow the refund state to completion.
- Confirm that it appears in branch, settlement, and reconciliation reports.
Why not use a manual transfer?
It breaks the relationship between sale and return, leaving reports with full revenue and an unexplained transfer. It can also duplicate the return if the original refund later completes.
Operational constraints
Total refunds cannot exceed original value, silently change currency, or delete the successful payment record. Reviewers should see who requested the refund, who approved it, and when the state changed.
Review Roles and permissions and Financial reconciliation.