Purchase credit notes

This explains how to record a credit note received from a supplier. This could be for returned goods, or when you need to cancel an invoice.

How this works

You can

  • Create a credit note from a single invoice. This is useful when you have returned goods from a single purchase invoice.

  • Create a credit note and match to invoices later. Use this when your supplier has sent you credit to use against future purchases, or the credit note is being used to pay more than invoice.

    Once saved, match the credit note to the invoice or invoices that it's paying.

Credit notes for stock items

We track 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.

When your record a credit note that includes a stock item, we create a Negative Goods In stock movement. This automatically reduces your stock level.

Credit a single invoice

  1. From Purchases , select Purchase invoices.
  2. Open the invoice you want to credit.
  3. Choose Add Credit Note from panel on the right.
  4. We create a credit note with the same details as the original invoice.
  5. Change the details as necessary. When you change the price, we automatically update the VAT and Total.

    The total value of the credit note cannot be more than the original invoice.

  6. 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.
  7. If required, enter any notes.
  8. If you want to attach a file, for example, a copy of the credit note the supplier sent you, select the attachment button. Read more about attachments
  1. When you have finished, choose Save.

The invoice will now show as paid or part paid.

Create a credit note

  1. From Purchases , select Purchase credit notes.
  2. Enter the supplier, date and reference.
  3. Enter the details of the items being credited. Enter each item on a separate line. Make sure you include the description, ledger account, price and VAT rate.
  4. If you use transaction analysis types, select the ellipsis (3 dots) and choose the relevant analysis category. Read more about transaction analysis types
  5. If the credit note is for goods or services purchased from a VAT registered supplier in the EU, choose whether this is item is for goods and related services or a stand-alone service in EU Goods/Services.
  6. If required, enter any notes.
  7. If you want to attach a file, for example a copy of the credit note the supplier sent you, click the attachment button > Upload files > browse to and double-click the file. Find out more about attachments >>
  8. If you want to come back and update the credit later, choose Save as draft.
  9. Choose Save

What's next

Edit or delete a credit note

Match a credit note to an invoice