Intro – Credit Note #

A credit note (also called a credit memo) is a document issued by a seller to a customer that reduces the amount the customer owes. It’s often used in situations like overcharge, a return of goods, damaged goods or incorrect model.

• A Credit Note does not update inventory data. If returned goods are inventory items and need to be added back to stock (assuming they are not damaged), please use Sales Return instead.
• Credit Note has “Delayed” option that allow you to include the credit note detail into invoice.
• A delayed credit note does not create a transaction journal, nor does it reduce the customer’s balance.
• Refunds feature included.

Create a Credit Note #

• Go to Sales on the left sidebar, and select Credit Notes
• Click Add New button in the top right corner.
• On the new page, fill in the following fields
  • Credit number is an auto generated number.
  • Customer: Select the customer for this quote.
  • Date: default is today.
  • Delayed: Select this option if you want to add credit note details to a new invoice.
  • Credit Reason: Choose a reason for this credit from the list. You may add a new reason if needed.
  • Draft: Select this option to save the credit note as a draft.
  • Select Invoice or Receipt: A credit note should refer to the customer’s invoice or receipt. A list of invoices and receipts will be provided once you select a customer. The details of the selected invoice or receipt will be automatically filled in to help you complete the credit note quickly.

• • Detail tab
    • Items table
      • Click “Add Row” button to add new detail line or click “Open Dialog” button to add quote detail line in the dialog.
      • Item. Select an item from the dropdown list. If the item is missing or not found, you need to create new item in Items -> Items app.
      • Description. Automatically filled when you select an item. You can edit it as needed. Maximum characters: 4096.
      • Quantity: Enter quantity.
      • Uom: Default unit of measure is Ea (each).
      • Rate: Rate or unit price is automatically filled when you select an item.
      • Amount: Equal to quantity multiplied by the rate. You can edit the amount, and the rate will be recalculated.
      • Taxable: Select this option if the item is taxable.

• • • Discount: A discount can be applied either by percentage or by amount.
    • Tax Code: Select a tax code from the predefined codes. These must be set up under Tax → Tax Code.
    • Tax Rate: Auto-filled when tax code is selected.  Tax rate field is editable, and system use it to calculate the excluded tax.
    • Excluded Tax: This is a calculated field and cannot be edited.

• • Refund tab
    • Is Refunded: Select this option if you issue a payment to a customer as a refund.
    • Payee: Specify payee’s name.
    • Cash/Bank Account:  Select which account to use for payment.
    • Payment Method: Required field.
    • Reference No: optional.

• • Account tab
    • Post with income breakdown by item: Select this option if you want to have detail of income and cost breakdown by product item in transaction journal.
    • AR Account: Credit note reduces the amount customer owe the company in the accounts receivable account.
    • Sales Allowance Account: This account is used to record reductions in the selling price of goods or services after the sale has been made. It is a contra-revenue account, meaning it offsets total sales revenue rather than increasing expenses.

• • Sales tab
    • Sales rep. Auto-filled when you select customer or invoice.
    • Deduct Commission. Select this option if the credit note reduces sales commission.

• • Address tab
    • Address: Auto-filled when you select customer or invoice.

• • Memo tab
    • Customer Message: Select message from the list. You may add a new message if needed.
    • Memo: Up to 1000 characters.
• Click Save