New Supplier Debit Note

A Direct Purchase Debit Note (also referred to as a Supplier Credit Note) is a formal document issued to a supplier to request a return of funds or a reduction in the amount owed. This is typically used when goods are returned due to damage, or when there is an overcharge on an invoice. Unlike a standard Debit Note, a Direct version allows you to record these adjustments immediately without needing to link them to a specific previous Purchase Invoice.To create a new Direct Purchase Debit Note, navigate to Purchases > Click "Debit Notes" Tab > Click "New Direct Purchase Debit Note". This process ensures your accounts payable and inventory levels are adjusted downward to reflect the return or credit.
 
Supplier
A supplier must be selected to issue the debit note. Choose the vendor from the dropdown list. You can search the list or view your most frequent suppliers. If the vendor is not yet in the system, click the + button to open a popup and add their details immediately.
 
Date
This represents the official financial date of the debit note. This date is critical because it determines the accounting period in which the reduction of liability and the reversal of tax credits are recognized.
 
Current Debit
The Current Debit field displays the real-time financial balance between your business and the selected supplier. This value indicates the net amount you currently owe the supplier or, in cases of overpayment or returns, the amount the supplier may owe you. A negative value indicates the amount the supplier owes you, while a positive value indicates the amount you owe the supplier. The amount is displayed as a clickable link; by clicking on it, the user can view a detailed history of all previous transactions, payments, and outstanding balances associated with that specific supplier.
 
Barcode
For faster entry of returned goods, the Barcode field allows you to scan an item’s barcode to automatically add it to the debit note. This ensures accuracy when identifying specific products being sent back to the vendor. To enable this: Go to Setup -> Preferences -> Use Barcode Functionality.
 
Reference
In the ERP system, the Reference field is used to uniquely identify each transaction, such as a Purchase Order, GRN, or Purchase Invoice. This is our unique reference for every transaction. The system allows the user to customize the reference number format as per your business requirement. User can define and modify the serial pattern in: Setup -> Transaction Reference The reference value can also be edited and changed without affecting the format, giving the user flexibility while maintaining consistency in your numbering pattern.
 
Workorder
If the items being returned were originally allocated to a production or service job, you can select the relevant Workorder here. This ensures the material costs are credited back to the specific internal job for accurate project costing.
 
Tax Included (Toggle)
This setting determines how the credit amounts are interpreted. If set to Yes, the entered price is treated as the total credit value including tax. If set to No, the system will calculate the tax reversal on top of the entered unit price.
 
Due Date
In the context of a Debit Note, the Due Date often represents the expected date by which the supplier should acknowledge the credit or provide a refund. This is usually calculated based on the Payment Terms assigned to the supplier.
 
Supplier's Reference
Enter the credit note number or reference provided by the supplier’s own system. Recording this is vital for future reconciliation and ensures both parties are referencing the same transaction during audits.
 
Branch
Select the business branch or location issuing this return. This ensures that the reduction in financial liability and stock updates are categorized under the correct organizational unit.
 
Department
Assign the debit note to a specific internal department. This allows for accurate departmental expense reporting, effectively "reversing" an expense previously charged to that department's budget.
 
Attachments
User can attach documents or images related to the return, such as photos of damaged goods or shipping receipts. Click the attachment icon or browse option to upload files, which are saved with the debit note for future reference.
 
Receive Into (Return From)
In a Debit Note, this field specifies the warehouse or storage point from which the physical goods are being removed. Selecting the correct location ensures your Quantity On Hand (QOH) is reduced in the right place.
 
Deliver To
Use this field to record where the goods are being sent back to, or the name of the carrier handling the return shipment.
 
Line Items
The Items section is where you record the details of the products being returned or credited:
  • Item Description: Select the product being returned. You can add new items or edit descriptions using the + and pencil icons.
  • Batch No & Exp Date: Critical for tracking the return of perishable or medical goods. Enter the specific manufacturer's batch number and expiry date of the items being sent back.
  • Quantity & Units: Input the amount being returned and select the relevant unit of measure.
  • Price Input: Enter the original cost per unit. Use the P button to view the Purchase History to ensure the credit matches the price originally paid.
    • Price After Tax: If the form is set to tax-included.
    • Price Before Tax: If the form is set to tax-excluded.
  • Discount: If a discount percentage was applied during the original purchase, it should be reflected here to ensure the credit amount is accurate.
  • Item Tax Type: Select the tax rate that was originally applied so the system can correctly reverse the tax liability.
  • Line Total: The system automatically calculates the total credit for the row after tax and discounts.
  • Add Button: Click the Add button to finalize the item and move it into the debit note table.
  • Edit Icon: Click the pencil icon at the end of a row to modify quantity or price before finalizing.
    • Confirm Changes (Check mark Icon): Click to save modifications to the line item.
    • Cancel Changes (Cancel Icon): Click to discard unsaved changes.
  • Remove Icon: Click the X (Delete) icon to remove an item from the debit note entirely.
 
GL Items
The GL Items section is a specialized area used to record non-inventory expenses or services directly onto a purchase Debit. Unlike the "Order Items" section, which tracks physical stock movement, GL Items are used for costs that do not have a physical quantity or warehouse location, such as professional fees, electricity bills, or maintenance services. This ensures that all costs associated with a purchase are captured in your financial records, even if they aren't physical products.
Quick Entry for GL Items
To speed up the process, you can use the Quick Entry dropdown located just above the GL table. This allows you to select a pre-defined expense category. Simply select the category, enter the Amount in the adjacent box, and click the Go button. The system will automatically populate the corresponding General Ledger account and amount into the table below.
Detailed Field Explanation
Within the GL Items table, you can manually define each expense row:
  • Account Name: Select the specific expense account from your Chart of Accounts. This tells the system exactly where to record this cost in your financial reports. If you need to add a new ledger account, click the + icon next to the dropdown.
  • Description: This text field allows you to provide specific details about the expense (e.g., "Monthly office internet for March"). This description will appear in your ledger reports for better audit tracking.
  • Tax Type: Choose the appropriate tax rate for the service. If the service is not taxable, select No Tax. The system will calculate the tax amount based on this selection and add it to the final invoice total.
  • Price: Enter the net cost of the service or expense. Here the tax is applied.
  • Add Button: Once all details for the row are entered, click Add to finalize the entry and include it in the GL Items total.
  • Edit Icon: After adding a GL, if a user needs to change any information, they can click the Edit pencil icon at the end of the row.
    • Confirm Changes (Check mark Icon): Click this button to save your modifications, such as updated quantities or prices.
    • Cancel Changes (Cancel Icon): Click this button to discard any unsaved changes and revert the line to its previous state.
  • Remove Icon: To remove an item from the order, simply click the X (Delete) icon displayed at the end of the respective row.
 
Quick Entry for GL Items
The Quick Entry feature allows you to create templates for recurring transactions, significantly speeding up data entry for common expenses. You can access and manage these templates by navigating to: Setup -> Quick Entries (found under the General Ledger section). When creating a new Quick Entry, if you select Supplier Invoice/Debit as the Entry Type, that specific template will become available for selection in the Quick Entry dropdown menu on your Purchase Debit screen. 
This is particularly useful for standard monthly costs like utility bills or professional services. To use a pre-defined template on an debit: Simply select the category from the Quick Entry dropdown, enter the Amount, and click the Go button. The system will automatically populate the account, description, and tax settings based on your setup.
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Total Details
The footer provides the financial summary of the credit being requested:
  • Sub-total: Sum of all items and GL credits before additional adjustments.
  • Shipping Charge: Enter any shipping costs you are being credited for, or costs incurred for the return.
  • Tax Breakdown: Provides a detailed view of the taxes being reversed (e.g., Input SGST/CGST).
  • Discount %: Apply a global discount adjustment if applicable.
  • Round Off: Adjust the final total for minor rounding differences.
  • Amount Total: The final net amount that will be deducted from your balance with the supplier.
  
Comments
User can add internal notes or a brief explanation for the return for future audit purposes.
 
Action Buttons
  • Enter Credit Note: Finalizes the transaction, reduces inventory, and updates the financial ledger.
  • Draft: Saves the entry as a work-in-progress without affecting your accounts or stock levels.
  • Cancel: Discards the debit note entirely.
 
General Ledger
The General Ledger ensures that every debit note is recorded with accounting precision. When a Direct Purchase Debit Note is processed, the system automatically creates the following entries:
  • Accounts Payable: This account is Debited for the full amount of the note, representing a reduction in the liability you owe to the supplier.
  • Inventory / Purchase Account: This is Credited to reflect the reduction in the value of physical goods or expenses.
  • Tax Accounts: These accounts (e.g., Input SGST/CGST) are Credited because the tax credit originally claimed is being reversed.
  • Shipping & Freight Account: If shipping costs are being credited, the account is Credited to reduce the recorded shipping expense.
  • Discounts Received: If a discount was included in the return, it is Debited to adjust the original discount benefit received.
  • Selected GL Line Item: If you added entries in the "GL Items" section, the specific expense account you selected will be Debited or Credited based on the nature of the adjustment (e.g., reversing an expense).
  • Exchange Variation / Rounding Account: A small adjustment account used to match total debits and credits when minor rounding differences occur, ensuring the ledger always remains perfectly balanced.

Custom Fields
Custom fields allow users to create their own form inputs based on their specific business requirements. If you need to record additional data for a return that is not available in the standard form—such as a "Reason for Return Code," "Quality Inspector Name," or "Vendor Authorization Number"—you can add these fields manually. You can create various input types, including text boxes, drop-downs, radio buttons, check boxes, date pickers, and amount boxes.
 
You can add custom fields to three main areas of the Debit Note:
  • Form Header & Footer: For general information that applies to the entire return transaction.
  • Line Items (Order Items): By clicking the Add Field option located at the top center of the Order Items section, you can add inputs that appear for every individual product row.
  How to Enable and Manage Custom Fields
To use this feature, follow these steps:
  • Enable the Feature: Go to Setup -> Preferences -> Show Add Custom Field on Forms. Once enabled, the Add Field buttons will appear in the form header, line items, and footer pages.
  • Instant Addition: You can click the Add Field button directly on the Debit Note form to create a new input box on the fly.
  • Permanent Management: If you want to modify, reorder, or delete custom fields permanently, navigate to the Setup -> Custom Fields page.
 
Debit Note Report
The Debit Note Report page is an organized section designed to help users extract detailed insights and documentation of supplier returns. Users can generate these reports as professional PDF or Excel files to share with vendors or for internal audits. This section allows you to view or print debit notes exactly as they are defined in your system profile.
  How to Access
To find this section, navigate to Reports > Purchases > Debit Notes. This page allows the user to filter, review, and print return data for any specific time period.
  Report Filters
On the right side of the screen, you can use several filters to refine the data before printing:
  • Template: Choose the visual layout of the report. For example, selecting a "Professional Debit Note" template from the list.
  • Date: Pick a specific date range (e.g., a month or quarter) to see all debit notes created during that time.
  • Currency Filter: Filter the report by specific currencies, such as Indian Rupee (INR), to isolate international vs. local returns.
  • Comments: Type custom notes or disclaimers that will appear prominently on the printed report.
  • Supplier: This filter allows you to run a report for just one specific vendor to track their total return history.
  • Orientation: Choose between Portrait (vertical) or Landscape (horizontal) layouts depending on the amount of data columns needed.
  Customizing Report Templates
You can create new PDF templates or modify existing ones to match your company branding:
  • Access the Editor: Navigate to the Reports Module and click the "Editor" button located in the top right corner.
  • Modify Existing Templates: Adjust colors, fonts, and table layouts of existing templates to suit your preference.
  • Create Own Templates: Build a completely custom template for every transaction type, ensuring your branding and specific data points (like custom fields) are displayed perfectly.
  Printing the Report
Once all filters are configured and the correct template is selected, click the blue Print button at the top of the filter column to generate the final document.
 

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