How to Issue a Refund on an Invoice

Use the Return Item flow to issue per-item refunds, select refund components, and apply credits to a client account.

Written By Gemma DeMasi

Last updated About 1 month ago

When a client returns an item or a refund is warranted, the platform provides a structured refund flow that lets you specify exactly what is being refunded, which pricing components to include, and whether to apply the amount as a credit to the client's account.

Accessing the Refund Flow

You can open the refund flow from two places:

From the Actions menu — Click the three-dot Actions menu on the invoice row in the list view and select Refund.
From the Quick View panel — Open the invoice's Quick View panel, click the More menu at the top, and select Refund.

Both paths open the same Return Item view, which displays all line items on the invoice.

Selecting the Item and Quantity to Refund

Check the item or items you want to refund. For each selected item, enter the quantity to refund. This allows you to issue a partial return on a multi-quantity line item without refunding the full amount.

Choosing Refund Components

For each returned item, select which pricing components to include in the refund:

Item Price — The base cost of the item.
Markup — The design markup applied to the item.
Freight — Any shipping or freight charges associated with the item.
Tax — Tax charged on the item.

Check or uncheck each component to build the exact refund amount. For example, you might refund the item price and markup but retain the freight charge if the item was already shipped.

Note: The refund total updates in real time as you select or deselect components, so you can verify the exact amount before confirming.

Apply Credit to Client Account

You can choose to apply the refund as a credit to the client account rather than processing it as a direct monetary refund. When this option is selected, the credit is attached to the client — not to the specific project — and can be applied toward any future invoice for that client.

This is useful when:

The client is replacing the item and the credit will apply toward a future invoice.
You want to issue a store credit rather than a cash refund.
The original payment was made outside the platform and a monetary refund will be handled separately.

Confirming the Refund

Once your items, quantities, components, and credit preference are set, click Record Refund to confirm. The refund will be recorded, the invoice balance will update to reflect the refunded amount, and the activity log will capture a timestamped entry for the return. The refund and any credit issued will also be visible in the Invoice tab of the Quick View panel.

Warning: Recording a refund here updates the financial record in the platform. If the original payment was processed through an external system or bank, you will need to initiate any actual monetary refund through that channel separately. The platform does not automatically trigger outgoing payments.

Important Limitations

Refunds are recorded at the invoice item level.
Client Credits are attached to the client account, not a specific project.
Client Credits are not automatically applied to future invoices; they must be manually selected during payment workflows.
Recording a refund in Indema should not be assumed to trigger an external processor, bank, or QuickBooks refund unless that behavior has been confirmed for your workflow.

What Happens Next?

After a refund is recorded:

The invoice balance updates based on the refund details
The refund appears in the invoice record
Any Client Credit created becomes available on the client account
The Activity Log records refund activity
Teams may apply available Client Credits during future payment workflows