Accounting: how do you record cancellations and returns as an online shop?

In general, cancellations and returns are booked as follows:

1. If you make a refund, book the amount refunded in the account “Customer Repayments” (also called “Customer Balances” or similar) in the main book. This account serves to collect refunds to customers.
2. If you receive fees for the refund, such as PayPal or eBay fees, book these fees on the Bank account in the main book. This account serves to collect money movements on and from bank accounts.
3. If you have to pay for the refund fees to third parties, for example to PayPal or eBay, book these fees on the bank cost account in the main book. This account serves to cover the costs of bank fees and similar expenses.
4. Finally, you should always carefully check the bookings to ensure that the balances of the relevant accounts are correct in the main book and all business transactions have been correctly recorded.

It is important that you carefully and accurately proceed when booking cancellations and returns in order to ensure that all relevant information is collected correctly and that the balances of the relevant accounts are correct in the main book. If you are unsure of how the bookings are done correctly, you should contact a accountant or a tax advisor who can help you.