Bill credit notes

When a supplier credits you - for a return, an overcharge, or a cancelled order - record it as a bill credit note. It is the mirror image of a credit note you issue a customer: instead of reducing what you are owed, it reduces what you owe.

Create a bill credit note

1. Go to Money Out and choose Bill Credit Notes.
2. Choose New bill credit note.
3. Pick the Supplier, and set the Bill credit note date and Bill credit note reference - use the supplier's own reference so the two documents match.
4. Set the Currency and Payment terms if they differ from the defaults.
5. Add a line for each item credited, with its Details, Category, Quantity and Amount. Choose Add bill credit note item for more lines.
6. Under VAT options, set the Notional VAT rate, or tick This is a reverse charge purchase (overseas supplier) where that applies.
7. Choose Create bill credit note.

It starts as a draft. Choose Mark as Sent once it is agreed with the supplier - a draft has no effect on your accounts, and the note has to be sent before you can apply it.

To change a note later, choose Edit. A draft you no longer need can be removed with Delete bill credit note.

Apply it to a bill

1. Open the bill credit note. The Applied to bills panel shows the amounts applied, refunded, and remaining.
2. Choose Apply to a bill.
3. Pick the bill from the supplier's outstanding bills and enter the amount.
4. Choose Apply credit note.

The bill's outstanding balance falls by that amount, and the credit note's remaining credit falls to match. Both documents must be for the same supplier and in the same currency.

To undo an application, remove the allocation in the Applied to bills panel.

When the supplier refunds you instead

If the supplier pays the money back, record it from your bank as money in.

1. Go to Banking, open the account, and open the money-in transaction for the refund.
2. Set the Type to Bill Credit Note Refund.
3. Choose the bill credit note, then save.

See Explain a transaction for the explaining flow in full.

Statuses

A bill credit note is Draft until you send it, then Open while credit remains. Once used it becomes Applied, Refunded, or Settled for a mix of both.

A sent note that will never be used can be closed with Write off, as long as nothing has been applied or refunded against it. To write off or delete a note that has allocations or a refund recorded, remove those first.

Related

• Create a bill
• Record a bill payment
• Apply or refund a credit note