You may have noticed a new feature in Beta on the Cost of Goods Sold Settings page, called ‘Include Refunds as Returns’.
With this setting enabled, refunds associated with a SKU are considered as product returns, so A2X will automatically:
Calculate the COGS for the refunded item
Include the refund amount as a separate line in your COGS posting
Before October 2025, the A2X COGS posting only captured the sale of SKUS, but now it will also include refunds.
This replaces the manual process of posting journal adjustments when items are returned.
This feature only accounts for the product refunds directly associated to a SKU and returned to inventory. If refunded products are not associated with a SKU or returned to inventory, a separate manual adjustment should be made
However, if refunds don't always represent returns for your business or if products aren't typically restocked, it may still make sense to use this feature to map refunds to an inventory loss account.
How it works
A2X captures refunded SKUS from the sales channel and then uses the current costs table in A2X to calculate COGS for refunds.
Refund COGS are posted based on refund date.
COGS postings include both Sales COGS and Refund COGS
These additional lines for refunds will be included in new (or refreshed) COGS postings once the setting has been enabled.
Refund COGS are grouped in a separate column in the COGS postings in A2XCOGS postings and in COGS exports.
Simplified explanation of entries
Inventory Asset Account - Sale of Goods | Credit |
Inventory Asset Account - Refund | Debit |
Cost of Goods Sold Expense Account - Sale of Goods | Debit |
Cost of Goods Sold Expense Account - Refund | Credit |
Setup guide
To turn on this feature:
Go to Settings → Cost of Goods Sold.
Enable Cost of Goods Sold.
Check Include refunds as returns.
4. Map accounts an Expense Account and an Asset Account for COGS Refunds.
Note: Depending on the sales channel, there might be some additional lines to map.
Grouping Settings (e.g., Sales by Product Type)
If you have your sales split by product type or SKU, then Refunds COGS will be split on the same page. More about grouping settings here.
Xero tracked inventory feature
This feature doesn’t currently support split by SKU quantity posting to Xero, but it is coming soon. If you use A2X to post your COGS to Xero tracked inventory, watch this space.
Review and post
Refund SKUs appear in their own table on the COGS posting review page.
2. Review the entry and post as usual.
Manual exports (General Journal CSV, NetSuite CSV, Sage CSV, IIF) include a distinct refunds section.
FAQ
Does this impact physical inventory count?
No. This is accounting only. This is not tied to inventory monitoring or adjustments.
Can I switch it off later?
Yes. Unselect the checkbox, then refresh affected settlements before posting.
Do partial refunds reverse COGS?
Only when the refund includes itemized SKU and quantity. Non‑itemized partials do not change COGS. RefundAdjustmentNotTaxed transactions will not affect Refunds by Returns as they are not associated with a SKU. More information can be found here
Will this change my historical COGS postings?
No. Posted settlements are not affected unless they are refreshed and resent. Refer to the screenshot above to see how settlements can be refreshed.
How are exchanges or goodwill refunds without item quantity handled?
No inventory move is posted. COGS reversal requires an itemized SKU and quantity.
How does refunded COGS affect A2X’s Amazon deferred transactions adjustments?
A2X does have a feature that accounts for Amazon’s deferred transactions by posting a month‑end adjustment that accrues still‑deferred transactions and reverses transactions released in the month.
The adjustment's COGS component is based on the same transactions that are included in the Sales and Fees posting. Find out more about how A2X manages Amazon deferred transactions here.
If you enable the Deferred transactions setting and the Include refunds as returns setting, you will also see a refunds component in the COGS section of your deferred transactions entry.