I might not be able to get to the refund portion in time for Nov release
But this is how refund should work
Make sure you have an expense category called Client Refund
Then when refunding a client create an expense
select Client Refund for the Category, enter the amount you want to refund them
In the client drop down select the client that will be refunded
For the Reference field Add the Invoice #
Then in the Description put what your refunding example line item and why you may want to include how as well like via check mailed on check ###
For the Account select the account you want the money to be pulled from to refund them.