Record supplier credit notes

Use this to enter credit notes individually and post them to a supplier's account in the Purchase Ledger. Credit notes are entered onto the Purchase Ledger in the same way as invoices. To enter your credit notes in a groups, use batch transactions.

If you are using authorisation, the Requires authorisation box is automatically selected. If the credit note value is less than the authorisation limit, you can clear the Requires authorisation box. If the credit note requires authorisation, the nominal ledger is not updated until the credit note is authorised.

By entering a credit note you reduce the turnover for the relevant supplier's account. You can also reduce the supplier's turnover values by reversing an invoice that has been posted to the supplier's account record.

If you want to produce a printed credit note and record the return of a stock item, use the Purchase Order Processing module.

  • In the UK, VAT on an invoice is only discounted when it is paid within the settlement discount period.

    On each invoice, VAT is calculated by default on the full invoice value. If the invoice is paid within the settlement discount period, a VAT adjustment is required, to account for the discounted VAT.

  • In Ireland, VAT is calculated on the full value of the invoice regardless of any settlement discount.

  • 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 purchase account(s) (profit and loss) in the Nominal Ledger are credited with the goods value according to the analysis.
  • The default input VAT account (for the balance sheet) in the Nominal Ledger is credited with the value of the VAT if included.
  • The creditors control nominal account (for the balance sheet) in the Nominal Ledger is debited with the gross value of the credit note.
  • The VAT file is updated with the goods and VAT value for each VAT rate used.

To record credit notes

Open: Purchase Ledger > Enter Transactions > Credit Note.

  1. Select the supplier account you want to add a credit note to.

  2. If the supplier's account is in a different currency, accept or amend the Exchange rate.

    You can change the exchange rate if the currency Amendability setting is set to allow this in Accounting System Manager.

  3. Enter the credit note details and amend default values where required.

    • To check that the Reference and Date combination is unique, click the button.

  4. Enter the Transaction details, Goods value, Discount percent, Discount days and Discount value.

    If the VAT on the credit note need to be discounted, select Settled immediately. Otherwise VAT is calculated at the full goods value.

    If you've received a credit for the VAT discount from your supplier or need to record an internal VAT adjustment, enter the VAT amount in the VAT value field. Leave all other values as 0.00.

  5. If required, enter the Project Analysis details for each item on the credit note.

    The Project Analysis tab is only available if you are using the Project Accounting module.

    If WIP is in use and enabled for the project, cost postings are made to the WIP account. Any uplift is also posted to the WIP code. The WIP value will show the full value of the cost including uplift. If WIP is not in use or not enabled for the project, the postings will go to the default nominal Expense code on the project item.

    • If Use Specified is selected on the cost item linked to the project item in the posting, the WIP account is the WIP code with the specified cost centre and department.
    • If not, then if Split postings between cost centres for balance sheet accounts is selected on the company's System Settings | Operational tab in Accounting System Manager, the WIP account is the project item WIP code and the cost centre and department from the parent project.
    • If Split postings is not selected, the WIP account comes from the project item WIP account and the cost centre and department are blank.

  6. Accept or amend the VAT analysis for each item on the credit note.

    If you are working with goods items which have different VAT rates applied to them, ensure the VAT value in the VAT analysis matches the VAT value VAT for the transaction.

  7. Accept or amend the Nominal analysis requirements for each item on the credit note.

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

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

  8. Click Save to store the credit note.

    Click Save and Retain Code to save the credit note but retain the customer account. This means that you can record another credit note for the same customer.

Attach files and scanned documents

You can attach files and scanned documents when you enter a purchase invoice or credit note, enter a nominal journal entry, view sales and purchase invoices, confirm goods received, or produce a VAT Return.

  1. To add an attachment or scanned image:

    • When you create a purchase invoice or credit note, select Save and Attach.
    • When you enter a nominal journal entry, select Post and Attach.
    • When you produce a VAT return, you'll be prompted to add attachments to the return.
    • When you confirm goods received, select the Attach Documents check box. You can add file attachments when you click Save to confirm receipt.
  2. To attach a file:

    • Select Attach File, then browse to the file that you want to attach and click Open.

      Tip: If you can't see the file, change the filter to show All Files. By default, the attachments filter only shows these file types: pdf, jpg, png, gif, txt, xls(x), doc(x), msg.

    • Drag-and-drop a file into the Attachments list. For example, you can drag-and-drop multiple files from Windows Explorer, or single files from an Outlook email.
    • Once the file has been added, you can enter a comment or reference in the Description column.

  3. To scan a document and attach it as an image, click Scan Using Device.

    • Select Start Scan to see a preview of the scan, and click OK to add it as an attachment.
    • If the scanned image doesn't look right, you can select Rescan to scan the document again.

For more information, see Scan and attach documents.

See also

Other tasks

Enter single supplier invoices

Batch transaction processing (Purchase Ledger)

Supplier payments

Reference

Authorise transactions

Correct posted supplier transactions

Processing (PL settings)

Record stock returns

Set up currencies

Foreign currency transactions

Current Transactions