Credit customers

A credit note lowers what a customer owes you. You raise one when goods come back, when an invoice charged too much, or when you agree an allowance. A posted invoice is never edited, so a credit note is also how you correct one.

Credit an invoice

Credit against the invoice whenever there is one, so the invoice’s balance falls with it and the credit note carries the invoice’s prices.

1. Go to Receivables ‣ Transactions ‣ Credit notes and click New credit note.
2. Pick the Customer.
3. On the Lines tab, click Credit from invoice. The panel lists the customer’s posted invoices that still have something left to credit.
4. Pick the invoice. Its lines are ticked, each with the quantity still creditable.
5. Untick the lines you are not crediting, and lower the Qty on a partial credit.
6. Click the button that adds the lines, for example Add 2 lines.
7. Enter the Reason, so the customer and your auditors can see why the credit was given.
8. Click Save draft.

The credit note takes the invoice’s currency, exchange rate, payment term, posting profile and discount, and credits each line at the invoice’s price. The invoice’s number shows above the lines and in the Source invoice column of the list.

Field	What it sets
Subsidiary	The company giving the credit. It cannot change once saved.
Customer	Who is credited. On a note drawn from an invoice, it is the invoice’s customer.
Date	The credit note’s date, which decides the fiscal period it posts in.
Currency and Exchange rate	Taken from the invoice; on a note with no invoice, from the customer.
Reason	Why the credit is given. It prints on the credit note.
Payment term	Taken from the invoice; on a note with no invoice, from the customer.
Sales rep	The rep the credit note belongs to.
Warehouse	Where stocked items come back into when the note posts.

Give a credit without an invoice

Raise a credit note on its own for a goodwill allowance or a rebate that belongs to no single invoice.

1. Click New credit note and pick the Customer.
2. On the Lines tab, pick the item in Item / description, and enter the Qty and Unit price of the credit.
3. Enter the Reason.
4. Click Save draft.

Note

A credit note with no invoice lowers the customer’s balance, but is not set against any invoice: their invoices keep showing their full Balance due, and a payment cannot use the credit. Credit against the invoice when you can.

Post a credit note

1. Open the draft from Receivables ‣ Transactions ‣ Credit notes and check it.
2. Click Post, then Confirm.

The credit note shows Posted. Its journal entry reverses the receivable, the revenue and the tax, the customer’s balance falls, and the invoice it credits shows the amount under Credited and a lower Balance due. A credit note cannot take more off an invoice than the invoice has left to credit.

Caution

Posting puts every stocked item on the note back into the warehouse. That is right when goods come back, and wrong when you only correct a price. To credit money alone, use an item that is not stocked, such as a service item for price adjustments.

A credit note raised by a sales return is posted for you, and receives no goods of its own: the return already brought them back.

Example

A wholesaler invoiced a garden centre for 50 bags of compost at 12.00 instead of 10.00. It raises a credit note on its own with one line, Price adjustment, a service item, quantity 50 at 2.00. The garden centre’s balance drops by 100.00 plus tax, and no compost goes back into stock.

Void a credit note

Void a credit note posted by mistake. The reversal books on the date you give.

1. Open the posted credit note and click Void.
2. In Date, enter the date the reversal books on.
3. Click Confirm.

The credit note shows Void, the customer’s balance rises again, the invoice it credited is owed again, and stocked items it brought back leave the warehouse.

Messages you may meet

Message	What to do
The document it credits is gone, or has less left to credit than this asks for.	Lower the quantities. The invoice has already been credited, in part, by another note.
The accounting period is closed.	Use a Date in an open period.
A movement states the warehouse the stock moves in.	The note holds stocked items but no Warehouse. Pick one and post again.
The document was declared to the tax authority; issue a credit note instead of voiding it.	The note has been declared for e-invoicing and stays posted.