Managing Refunds on Funded Accounts
Sometimes prop firms issue refunds related to funded accounts. These might be challenge fee refunds given after you get funded, or other credits. Recording them properly ensures accurate financial tracking.
What Counts as a Refund
A refund is money returned to you by the prop firm. In the context of funded accounts, this often includes:
Challenge fee refund — The original evaluation fee returned after you get funded
Account credit — Compensation for technical issues
Promotional refund — Partial refund from a promotion
Closure refund — Money returned when a firm closes
The Critical Distinction
Refunds are cost recoveries, not income.
This is essential for accurate accounting:
When you receive a $500 payout, your business earned $500. When you receive a $500 refund, your net cost decreased by $500.
Both put money in your pocket, but they're categorized differently for proper business tracking.
How to Record a Refund
Open the funded account detail drawer
Go to the Refunds tab
Click Add Refund
Enter the details:
Amount — Refund value
Date — When received
Notes — Why you received it
Save
Where Refunds Appear
In the Account
The Refunds tab shows all refunds for this account with dates and amounts.
In the Dashboard
Refunds appear in "Money In" but are typically shown separately from payouts. This lets you see:
True revenue (payouts)
Cost recoveries (refunds)
In Reports
The Annual Tax Summary separates payouts and refunds, which is important for tax purposes.
Challenge Fee Refunds
Many prop firms refund your challenge fee when you successfully get funded. To track this:
Option 1: Record on the Funded Account Add the refund to the funded account that resulted from passing. This links the refund to where it originated.
Option 2: Record on the Challenge Some prefer recording it on the original challenge since it was a challenge cost being refunded.
Either approach works—pick one and be consistent.
Impact on Your Metrics
When you record a refund:
It creates a ledger entry of type "Refund"
Your "Money In" increases
But it's categorized as a refund, not revenue
Your net challenge cost decreases
Example:
Original challenge cost: $500
Refund received: $500
Net challenge cost: $0
The challenge didn't make you money—you broke even on the cost. Any payouts from the resulting funded account are your actual profit.
Refunds vs. Payouts: Why It Matters
Imagine you have:
Total payouts: $10,000
Total refunds: $2,000
If these were combined, you'd think you earned $12,000.
In reality:
You earned $10,000 in profit from trading
You recovered $2,000 of costs
The distinction matters for:
Understanding true revenue — How much did your trading actually generate?
Calculating ROI — What's your return on the costs you didn't recover?
Tax reporting — Refunds and income may be treated differently
Common Refund Scenarios
Challenge Fee Refund After Passing
Most common. The firm returns your evaluation fee as a reward for passing.
Record: The full fee amount as a refund, noting "Challenge fee refund."
Partial Account Credit
The firm gives you a credit for an issue (platform downtime, error, etc.).
Record: The credit amount as a refund with an explanation.
Promotional Cashback
A promotional offer gives you back part of your cost.
Record: The cashback amount as a refund.
Account Closure Refund
When a firm closes your account (not due to breach) and returns something.
Record: Whatever amount they returned.
Best Practices
Record refunds when received
Don't record when promised—record when the money actually arrives.
Include clear notes
Document why you received the refund. This helps when reviewing later or preparing taxes.
Keep refunds separate from payouts
Don't combine them in your mental accounting. They serve different purposes.
Link to appropriate account
Record the refund where it makes most sense—on the funded account or the original challenge.
Checking Your Net Position
After recording refunds, you can see your net position:
For a specific challenge: Net Cost = Original Cost − Refunds Received
For your business overall: Net Challenge Investment = Total Challenge Costs − Total Refunds
This shows how much you've truly invested in challenges after recovering some costs.
Next: Using the Account Detail Drawer →