How a refund flows
- Customer cancelsThe customer asks to cancel, and the agency checks the fare rules for the refundable amount.
- Refund is processedThe agency processes the refund in the GDS, BSPlink or the airline portal.
- Airline refunds the agencyThe airline returns the refundable amount, less its cancellation charge, through BSP or the agency’s airline account.
- Agency credits the customerThe agency issues a credit note for the amount due to the customer, less any agency cancellation fee.
- Customer is paid or creditedThe balance is paid out or kept on the customer’s account against future bookings.
The entries behind a refund
| Event | Debit | Credit |
|---|---|---|
| Refund confirmed by the airline | Airline account (amount refundable) | Customer account (credit note) |
| Agency cancellation fee charged | Customer account | Cancellation fee income and GST output |
| Refund paid to the customer | Customer account | Bank |
| Airline settles the refund | Bank or BSP settlement | Airline account |
Entries vary with your chart of accounts and with how the original sale was recorded. Agree the structure with your accountant.
Common refund problems
- Refunds processed in the GDS but never recorded, so the customer balance is wrong
- Credit notes raised without a link to the original invoice
- Refunds that arrive in a later BSP period and are missed in reconciliation
- Agency fees that are charged but not reported for GST
Refunds in SYSTACC
In SYSTACC, a refund comes back against the original ticket, so the credit note, the adjusted airline payable and the customer balance all start from the sale they change. Open refunds stay visible until the airline settles them, and BSP reconciliation picks them up from the same record.
