What Are Reversed Monetary Contributions and Refunded Contributions & How Do I Add Them?

Reversals and Refunds can be similar in that they’re both negative cash and negative net worth transactions. The line between the two is subtle.

On internal financial reports, like a Profit & Loss statement, a reversed monetary contribution will show as a negative on the profit side while a refunded contribution will show up on the loss side.

Which one do I use?

Reversals are when the monetary contribution deposit is not fully completed. An example of this is when a deposited check is returned for insufficient funds.

A refunded contribution is when there is separate action taken. For example, your campaign chooses to send the money back to a donor because they have exceeded limits.

How is each reported?

Most commonly, the transactions will show the Reversed Monetary Contributions on the Monetary Contribution schedule as a negative and the Refunded Contributions with expenses. However, this will vary per agency, as some have specific schedules for either or both of these.

How do I add a Refund?

When creating a refund, two separate transactions will be created

Original transaction: This transaction most likely already exists in your database prior to the need for a refund.
Refunded transaction: This will be the second transaction created, as the refund.

Presupposing that the original transaction already exists in your database, take the following steps to create the refund. If you still need to create the original transaction, please do that prior to following these steps:

From either the entity’s record or the Register, click the hotdog menu to the far right of the transaction
Select Add Refund
Ensure the populated fields, except for the Date, match the original transaction details
If the date of the refund is different than the current date, change the Date to match when the refund occurred
Complete the remaining applicable fields and click Save

A typical example of when you would need to use the refund process: a contribution is deposited into your bank account; then, for various reasons, the donation needs to be returned to the donor. This is a refund of a Monetary Contribution.

How do I add a Reversal?

Similar to the refund, the reversal will also create two transactions:

Original transaction: This transaction most likely already exists in your database prior to the need for a reversal.
Reversed transaction: This will be the second transaction created, as the reversal.

Again presupposing that the original transaction already exists in your database, take the following steps to create the reversal. If the original transaction has not yet been created, please do so prior to taking the steps below.

Create a new transaction from the entity’s record, the Register, or the Add Transaction option under the Accounting tab
Match the details of the original transaction except for the Date
In the Date field, use the date of the reversal
Click the Is Reversal box towards the top
Complete the remaining applicable fields and click Save

An example of when you would use a reversal is if after you deposit a check into your account you receive a notification the check bounced. This becomes a reversal situation since the funds never truly hit your account.

Can I just delete the original contribution?

Please don’t.

Keeping an accurate and complete record of everything that happened is critical for proper bookkeeping. Entering the original monetary contribution and then a refunded contribution or reversed contribution ensures that you can (a) properly reconcile your bank account, (b) meet legal compliance reporting needs, and (c) have a clear record for future reference.