Once you have created a Credit Note you then have the option to either allocate it to an existing invoice/bill or refund the money.

This Knowledge Article covers how you can process a refund for a Credit Note

1. Process the Customer refund in your Internet Banking (Sale Credit Notes) or request a refund from your Supplier (Bill Credit Notes)
2. Once the refund payment appears on the Bank Feeds screen, process the Credit Note refund
3. In Xero go to Contacts > All Contacts
4. Find the Customer / Supplier Contact you have created the Credit Note for
5. Open the Credit Note by clicking on the Credit Note number
   
   è The Credit Note will open on the screen
   
6. Go to the Make a cash refund pane
   
   
   
7. Select/Edit the following details:
   • Amount > confirm the refund amount
   • Date > make sure the refund date matches the date of the payment in the Bank Feeds
   • Paid From > select the Bank Account the refund was processed from/to
8. Click on [Add Refund]

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