Create and manage sales credit notes
If you provide a customer with a credit note, for example, because they’ve returned faulty goods, you can create this from the original invoice. Alternatively, you can create a standalone credit note, and allocate this to any outstanding invoice at a later date. You can choose to print or email the credit note to the customer.
Before you can create the credit note, if you haven’t already done so, you need to create your customer records. If you supply your customers with the same products or services, to save time when entering your credit notes, you can also create records for these.
If required, you can customise the appearance of your credit notes, add your company logo and include your terms and conditions.
- Go to Sales, then select Sales Invoices.
- Select the invoice you want to credit.
- From within the invoice select Add Credit Note.
The credit note appears with the details of the original invoice.
- If necessary, you can amend the details. For more information see the following section.
The credit note net and VAT totals appear at the bottom of the credit note. The credit note total can’t be more than the amount outstanding. To view a breakdown of the VAT amounts, click the Total VAT, then to return to the credit note, close the VAT Analysis window.
- If this is a draft credit note, select the Save as draft check box. You can return to the credit note at a later date when you’re ready to update the ledgers and clear this check box.
- If required, enter any notes. Then click Save.
You’ve successfully entered a credit note against the original sales invoice. If the credit note covers the full value of the invoice, the invoice status appears as Paid, otherwise the status appears as Part Paid.
- Point to Sales then click Sales Credit Notes.
- Click New Credit Note, then enter the following information:
|Name *||Enter the customer name. As you type, a list of customers appears. Simply choose the customer from the list.
Tip: To add a new customer, click in to the Search for a Customer box, then click Add a customer. Enter the relevant information, then click Save.
|Credit Date *||Enter the date of the credit note.|
|Reference||If required, enter a reference, for example, a customer return authorisation number.|
|Address *||If there’s a main address in the customer’s record, this appears automatically.
If there is no address on their record, click Add a main address then enter the address and click Update.
Note: This doesn’t update the address in the customer’s record.
|Delivery Address||By default, the delivery address is the same as the customer’s main address.
If you don’t want to use this address, click the edit button, then select whether you want to use the invoice address, no address or a custom one. If you selected Custom, you must enter the address. To save the changes you’ve made, click Update.
* These details are compulsory.
- To issue a credit note for a specific product or service, type the name of the item in the Product/Service box.
Then choose the required item.
The information for the chosen product or service appears on the next available invoice line. If necessary, you can change this information, for example, the quantity or unit price. If you need to create a new product or service record, click Create Item.
- To add more products or services to the credit note, repeat the step above.
- If you don’t want to add a product or service to the invoice, enter the following information:
|Description *||Enter a description for the credit. You can enter up to 2000 characters.|
|Ledger Account *||Choose the nominal code for the credit.|
|Item Code||If necessary, enter a code. For example, a part number or stock code.|
|Qty *||Enter the quantity of items sold.|
|Unit Price *||Enter the net value of the item.|
|Discount||If you want to enter a discount as a fixed amount, enter the value in the Amount box and leave the percentage as zero. If you want to enter a discount as a percentage, leave the value in the Amount box as zero and enter the percentage in the % box.|
|VAT Rate *||Choose the relevant VAT rate.
Tip: If your business is VAT registered and you don’t have the option to choose a VAT rate, check you’ve entered your VAT scheme correctly in Settings > Financial Settings.
|VAT Amount *||This calculates automatically based on the quantity, unit price and VAT rate.|
|Total||This is the total gross value of this item line.|
* These details are compulsory.
- If you’ve created transaction analysis types, for example departments, click the double chevrons button, then choose the relevant analysis category.
- If you’re issuing a credit note for goods or services to a customer in the EU, click the double chevrons button, then choose whether the item is Goods (and related services) or Services (standalone).
If the customer is VAT registered, you must also choose which EU sales description you want to appear on the credit note.
- If required, enter any notes and terms and conditions.
- To credit any postage charges, under Carriage, choose the relevant VAT rate and enter the net amount.
The overall net amount of the credit note and VAT total appear at the bottom of the credit note. To view a breakdown of the VAT calculated, click Total VAT, then to return to the credit note, close the VAT Analysis window.
- Choose one of the following options:
|Save as draft||To save the credit note as draft, select the Save as draft check box, then click Save. You can use this option if you’re not ready to send the credit note to your customer yet and don’t want to update the ledgers. When you’re ready to issue the credit note, simply open the draft credit note, make any changes as necessary and clear the Save as draft check box, then click Save.|
|Save||To save the credit note only.|
|Save & Email||To save and email the credit note. The Email Credit Note window appears. If the customer has an email address in their record, it appears in the To box. You can enter additional email addresses separated by a semicolon.
To receive a copy of the credit note to your registered email address, select the Copy to me check box. The subject line by default contains the credit note number, value, and date, you can change this if you want. The default email message appears in the body of the email, you can also change this if you want.
To also print a copy of the credit note, select the Also print a copy of this credit note check box.
|Save & Print||To save and print the credit note. The credit note opens in a new window or tab and you can choose to save or print the credit note from your browser file menu.|
|Save & New||To save the current credit note and then enter a new one.|
You’ve successfully entered a credit note which you can allocate to an invoice.
To help you manage and keep track of the sales credit notes you create, you can view details such as when you created the credit note if you emailed or printed it and when the credit note was paid.
- Go to Sales and select Sales Credit notes.
- Select an existing credit note created after 01/03/2019.
Hover over the following options to view the details:
|Created||Shows the date and time you created the credit note.|
|Sent||Sent as PDF – Shows as manually submitted. If you then email the credit note, it will change to emailed.|
Emailed – Shows the customer’s email address or addresses and the date and time you sent the email for all email addresses in the To and CC lines of the email.
Green – shows when at least one of the emails have sent.
Red – If one email fails to deliver.
You may need to refresh this page to update this status.
|Viewed||Shows the email address and date when the customer viewed the email.|
If tracking is important, you can clear the Include attachment check box in the email window.
If your customer’s email provider doesn’t confirm when they view emails, the Viewed status doesn’t update. This means your customer may have viewed the sales credit note even if the status hasn’t changed.
To use the viewed status, you must email the credit note when you create it or when you click into the individual credit note. It is not possible to track the viewed status if you email it from the Sales Credit Notes page.
- Point to Sales, then click Sales Credit Notes.
- Click on the relevant credit note to open it’s details.
From here, you can:
- View the details of the credit note, including whether it’s paid or unpaid.
- Check if the credit note has been issued or not. The credit note shows as issued if you’ve emailed or printed the invoice.
- Email the credit note. You can send your credit note to your customer as a PDF file attachment.
- Print the credit note. Depending on your Internet browser the credit note opens in a new window or tab and you can choose to print from your browser file menu.
- Copy the existing credit note. This creates a new credit note with the exact same details without having to re-enter the information.
- Edit the existing credit note. If this is a standalone credit note, and it hasn’t yet been included on a VAT Return, you can edit the existing information. If it’s been allocated to another transaction or included on a VAT Return, you can’t amend it. For more information, please see To edit or void a sales credit note.
- Record a refund against the credit note.
You can easily view which sales invoices have been allocated to your sales credit notes.
- Locate and open the credit note from the activity section on the contact record or, from the Sales tab.
- Click the Amount Paid value.
The allocation details of the transaction appears here.
To view further details, click the value in the Amount column.
Accounting tracks your stock by recording stock movements each time stock is bought and sold. Each stock movement has a type which records whether stock was added or removed. So whenever you record a sales credit note that includes a stock item, a Negative Goods Out movement is tracked and increases your stock levels are automatically as goods have been returned.
If you want to correct a price rather than change your quantity of stock, we’ve created a guide to help you do this.