Supplier purchase credit notes

Find this screen

Open: Purchase Ledger > Enter Transactions > Purchase Credit Note

How to

Enter a credit note

Open: Purchase Ledger > Enter Transactions > Purchase Credit Note

  1. Select the Supplier account.

  2. Enter the Credit note details.

    • Enter the Credit note date.

    • Enter a Reference and Second reference.

  3. Enter the Goods value.

  4. The Discount credit note total shows the credit note total including the settlement discount (if applicable).

    To view or change the discount, select Show Discount Details.

    • The Discount value is calculated using the settlement discount values Discount days and Discount percent, which come from the supplier's account. You can change these if required.

  5. If you use invoice authorisation, you'll see a Requires authorisation option in the credit note. This is automatically selected, and you can only deselect it if the value is less than the authorisation limit. See Use authorisation.

  6. The VAT Analysis section shows the default VAT rate from the supplier's account.

    • If your credit note uses more than one VAT rate, add a line for each VAT rate in the VAT Analysis section.

      Make sure the Totals in the VAT Analysis section match the Goods value and VAT value for the credit note in the Transaction Details section.

  7. The Nominal Analysis shows the default nominal code from the supplier's account.

    • If you want to post the credit note to more than one nominal account, you can add a line for each nominal account in the Nominal Analysis section.

      Make sure the Totals in the Nominal analysis section match the Goods value for the credit note in the Transaction Details section.

      Note: Both positive and negative values can be entered in the Goods value for nominal analysis.

      Note: If you select a memorandum nominal account, its goods value will not counted towards the total value of the transaction.

    • If you use transaction analysis codes, you can select a Transaction Analysis code for the transaction. You may have customised the Transaction Analysis name for your business.

    • You can change the Narrative to make it more meaningful for your business.

  8. To finish entering the credit note, select Save.

    If you want to enter another credit note for the same supplier, select Save and Retain Code.

Enter a foreign currency credit note

When you select a foreign currency supplier account, there are some differences when you enter the credit note:

  1. Enter the Goods value in the same currency as specified on the credit note.

    This should be the same as the currency on the supplier's account.

  2. If you need to amend the Exchange rate, select Change Rate.

    The default exchange rate is set in Currencies and Exchange Rates in the Sage 200 desktop.

    This can be the Single or Period rate. If the supplier uses a Single Exchange Rate, the exchange rate set when entering the invoice is used to calculate the base currency amount. If the supplier uses a Period Exchange Rate, the relevant period exchange rate is used.

    If the invoice requires authorisation, the exchange rate set when the invoice was entered is used and not the exchange rate set when the invoice is authorised.

    Note: You can only change the exchange rate here if the exchange rate is set to be Amendable.To check or change this, use Currencies and Exchange Rates in the Sage 200 desktop.

Enter a settlement discount

The way that you record the settlement discounts will depend on how your supplier deals with any settlement discounts they offer you. You may receive invoices and credit notes in the following scenarios:

  • If your supplier sends you an invoice with the VAT calculated at the full value of the invoice, the invoice also includes details of any settlement discounts due, and the supplier is not going to send a credit note to account for the difference:

    1. Select Show Discount Details and record the discount details. The VAT is not discounted.
    2. The Discount invoice total is the amount that you expect to pay within the discount period.
    3. You will need to enter and allocate internal adjustments to account for the discounted VAT (in the Sage 200 desktop).

  • If your supplier is going to send you a credit note to account for the VAT discount:

    1. Select Show Discount Details and record the discount details. The VAT is not discounted.
    2. Select VAT adjustment document expected. This is so you know when to wait for a credit note for the VAT discount.
    3. The Discount invoice total is the amount that you expect to pay within the discount period.
    4. Enter and allocate the credit note when you receive it (in the Sage 200 desktop).

  • If the VAT on the invoice you have received is already discounted.

    1. Select Show Discount Details and record the discount details.
    2. Select Settled Immediately to indicate that you've already paid and qualified for the discount. The VAT is automatically discounted.
    3. No further adjustments are necessary.

Use authorisation

If you've chosen to Use authorisation (in the Supplier Defaults and Settings), you'll see a Requires authorisation option in the credit note. This is automatically selected.

When the credit note is saved, the net value is posted to the Unauthorised purchases nominal account.

You can't allocate a refund to the credit note until it's authorised, by using Authorise Supplier Transactions.

  • You can't allocate a payment to the invoice until it's authorised.

  • You can't allocate an unauthorised credit note to an invoice.
  • You can't reverse an unauthorised invoice or credit note.
  • Transactions that have not been authorised are assigned an unauthorised query flag (U). You can see this flag on the Supplier Transaction Enquiry.
  • Invoices or credit notes that require authorisation are posted to the default nominal account for Unauthorised Purchases. Make sure that you select a default nominal account for Unauthorised Purchases, otherwise postings will be made to the Suspense Account.
  • When you authorise the transactions, the original postings (to Unauthorised Purchases) are automatically reversed. You can then apply your usual nominal analysis.

Useful Info

Early settlement discounts

When an invoice that contains settlement discount is paid within the settlement discount period, the VAT is only charged on the discounted invoice amount. VAT must be calculated and shown on the invoice at the full rate. If the customer pays within the settlement discount period, the VAT is discounted and a VAT adjustment must be processed.

The HMRC requires businesses to:

  1. Notify their customers of the VAT discount available and the amounts the customer is due to pay. This can be done in one of two ways:

    1. Issue an invoice detailing the full net and VAT payable. If the invoice is paid within the discount period, issue a further VAT only credit note to account for the VAT discount.
    2. Issue an invoice document which states the amount of discount (net and VAT) that can be claimed if the invoice is paid early, as well as the full amount (net and VAT) due after the settlement discount period. If the invoice is paid within the discount period, there is no need to issue an additional credit note. However, internal VAT adjustments will be required.
  2. When an invoice is paid immediately, the settlement discount is automatically taken. The VAT is discounted on the invoice and no subsequent VAT adjustment is necessary.

Note: In Ireland, VAT is always charged at the full value of the invoice, regardless of any settlement discounts.

Fix it

You'll see warning if you have set Transaction date validation in System Settings in the Sage 200 desktop.

  • If the date entered is in the Unacceptable range, the transaction cannot be saved.

  • If the date is in the Acceptable range, the transaction can still be saved.

This could be because:

  • The exchange rate is not set to be Amendable. To check or change this, use Currencies and Exchange Rates in the Sage 200 desktop.

What happens when I

Save a credit note

If you have set the nominal ledger to update immediately in System Settings, the nominal account and supplier account are updated immediately. If the transaction is dated in a future period, it is posted when the period is opened.

If you have not set the nominal ledger to update immediately, transactions in open or closed periods are posted to the current postings file, and transactions for future periods are posted to the deferred postings file.

  • The supplier's account balance is reduced by the gross value of the credit note (including VAT if appropriate).
  • The account's turnover for this period (or for the next period if a future period's date is entered) is decreased by the net amount (goods value) of the credit note.
  • The VAT file is updated with the goods and VAT value for each VAT rate used.

  • The transaction is posted to the following nominal accounts:

    Nominal transactions for a purchase credit note
    Nominal Account Debit Credit
    Purchase Account   Net goods value
    VAT Input   VAT value
    Creditors Control Account Gross value  
See also

Other tasks

Supplier purchase invoice

Reference

Authorise supplier transactions (purchase invoices and credit notes)

Supplier defaults and settings