Invoice to Credit Note

The Credit All or Part of an Invoice screen is used to issue a Credit Note against an existing Sales Invoice. This process is essential for handling sales returns, correcting overbilling, or providing customer discounts after an invoice has been processed. It adjusts the customer's balance and, depending on the type selected, returns items to inventory.


Header Information

The header details are pulled directly from the original Sales Invoice to ensure the credit is linked correctly:

  • Customer & Branch: The client receiving the credit (e.g., Obito). These are locked to the original invoice details.
  • Reference: The unique identification number for this Credit Note (e.g., 024/2026).
  • Crediting Invoice: A clickable link to the source Sales Invoice (e.g., INV-2026118) that is being credited.
  • Credit Note Date: The date the credit is officially issued. This defaults to the current date but can be modified.
  • Current Credit: Displays the customer's total available credit balance after this transaction (e.g., 1,167.000).
  • Branch & Department: Shows the organizational unit (e.g., 1234 Supply branch) and department responsible for the original sale.
  • Shipping Company: Displays the carrier linked to the original transaction.

Credit Items Table

This section allows you to specify exactly what is being credited. You can perform a Partial Credit by only selecting specific items or quantities:

  • Item Code & Description: The product details carried over from the invoice (e.g., 123456 - test 1).
  • Sales Agents: The agent who originally handled the sale.
  • Invoiced Quantity: The total quantity that was billed in the original invoice.
  • Credited Quantity: Shows if any portion of this item has already been credited in a previous transaction.
  • Credit Quantity: Critical Editable Field. Enter the exact quantity you wish to credit now. This cannot exceed the remaining invoiced amount.
  • Price & Discount: The unit price and discount rate used in the original invoice. These are used to calculate the credit value.
  • Total: The final value to be credited for this specific line item.

Credit Totals Section

This section calculates the final financial impact of the credit note:

  • Credit Shipping Cost: Use this field to credit the original shipping charges back to the customer if applicable.
  • Sub-total: The sum of all credited items before taxes and additional adjustments.
  • Discount (-) / Round Off (+) Amount: Allows for manual adjustments or rounding to ensure the credit matches the desired refund amount.
  • Amount Total: The grand total value that will be deducted from the customer's outstanding balance.

Credit Note Type & Inventory Handling

This determines how the system treats the physical items being credited:

  • Credit Note Type: Choose "Items Returned to Inventory Location" to add the items back into your stock, or a different type if the items are damaged or not being returned.
  • Items Returned to Location: Select the specific warehouse (e.g., Default) where the returned stock should be placed.
  • Bank Account: If you are giving an immediate cash refund, select the appropriate bank/cash account. Choose "No Cash Return" if the credit should remain on the customer's account for future use.

Memo & Attachments
  • Choose File: Use this to attach photos of returned goods or signed return authorization forms.
  • Memo: Enter the reason for the credit (e.g., "Goods damaged during transit" or "Customer overcharged").

Action Buttons
  • Update: Saves the current details without finalizing the credit.
  • Process Credit Note: Finalizes the transaction, updates the customer ledger, and adjusts inventory (if selected).

General Ledger (GL) Impact

Processing a Credit Note reverses the original sales entry. Typically, the system will:

  • Debit Sales Revenue: To reduce the total income recorded.
  • Credit Accounts Receivable: To reduce the amount the customer owes.
  • Debit/Credit Inventory & COGS: If items are returned to stock, the inventory value is increased and the cost of goods sold is reduced.

Notes

Our system allows you to split a single invoice into multiple credit notes. Whether you are processing a partial return today or correcting a billing error in stages, you can choose to credit only specific quantities now and leave the rest of the invoice balance for later. By simply adjusting the "Credit Quantity" field, the system automatically tracks what has been credited and what remains available on the original invoice.

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