Skip to main content
Documentation
Documentation
Administrator Guide
Last Updated: 2026-03-13
Steps: Create a Customer Refund

Steps: Create a Customer Refund

We plan to retire Customer Refunds 1.0 in September, 2026. Workday recommends that you opt into the
Customer Refunds Optimization
 feature to separate payments from refund documents so that the payment date reflects the date you settle the refund. See Steps: Create Customer Refund Payments in Settlement Runs.
Configure the
Customer Refund Event
 business process and security in the Customer Accounts functional area.
Customers can overpay their invoices for various reasons, such as an error or a change in transaction. Workday enables you to refund that amount.
Example: A customer pays for an invoice with no remittance advice. You put the payment on account. Later, when the customer cancels the order, you can use the on-account payment to process a refund.
To create refund for a payment, make sure that:
  • The payment either has a credit adjustment or has an amount on account.
  • A deposit exists for the on account payment.
  1. Determine whether you want to create the customer refund from On-Account Payments or Invoice Adjustments.
    Option Description
    On-Account Payments
    • Access the customer payment on the
      Invoices and Payments
       tab on the
      Customer
       profile.
    • Select
      Customer Payment
      Apply
       from the related actions menu of the payment and put it on-account by entering the amount in the
      Amount to Place On-Account
       field.
    Invoice Adjustments
    • Access the customer invoice on the
      Invoices and Payments
       tab on the customer profile.
    • Select
      Customer Invoice
      Create Adjustment
       from the related actions menu of the invoice.
    On-Account Documents
    When the
    On-Account at Invoice
     is enabled for a company and an On-Account Document (OAD) exists for overapplied payments, Workday displays all open OAD in this grid.
    You can select 1 or multiple OADs and specify the amount you want to refund.
    Considerations:
    • Canceling a customer refund payment correctly reverses the changes to the OAD status and balance.
    • You can't unapply, cancel or return a customer payment, or cancel a deposit with an on-account document that’s part of an active customer refund
    • When you create a customer refund, you can only select the on-account documents that are in Approved status and part of a refund document that hasn’t been paid.
  2. Access the
    Create Customer Refund
     task.
    • Select the customer you’re creating the refund for, as well as the currency, date, and payment type of the refund.
    • Configure a payee remit-to address. The
      Payee Remit-To Address
       prompt is available only if you opt into the customer refund optimization.
  3. Select the invoice adjustment or on-account payment for the refund.
    • To issue partial refunds, you can specify a
      Refund Amount
       that's greater than zero or less than the amount available to refund.
    • You can continue to create refunds from an on-account payment as long as there’s sufficient on-account balance.
    • Workday prevents you from selecting any on account payment when it's already part of a refund.
  4. Access the
    Create Settlement Run
     task to issue the refund.
    When you issue the outgoing payment check for the customer refund, the
    Remit-To Address
     report field uses the most recent effective-dated address of the customer contact where the
    Usage
     is
    Remit To
    . This report field doesn't consider the
    Primary Address
     flag when determining the address for the check.
The bank issues funds back to the customer.