How do I record a refund I receive for a paid bill?

A refund received from your vendor can be recorded in the form of vendor credits. A bill that has been completely paid, however, means all dues towards that vendor have been settled, and a refund cannot be subtracted from it unless the bill payment is reverted.
To record a refund under such cases, you can:

• Go to the Purchases module from the left sidebar and navigate to the Bills section.
• Open the respective bill under Paid Bills.
• Click the More icon and click Create Vendor Credits.
• Now, open the vendor credit that has been created.
• Again, click the More icon and from the list, choose the Refund option.
• Enter the refund amount and click Save.