Issuing a Credit Note to a Company

Irrespective of the reason for why they are issued, conceptually credit notes have a monetary value that the client can use to offset against money that they owe.

Viewed from this perspective, they function identically to payments that the clients makes, in that :-

They key exception being that they do not represent physical money received to your Bank from the client.

This topic outlines how to record in strokeone that a credit note has been issued to a company.

Prerequisites

Procedure

The fields in the credit note header are essentially identical to those in an invoice, so please see Populating Invoice Header fields for a detailed explanations, Below is a summary of the fields:-

Field	Instructions
Contact	Records the name of the person at the client company who has been informed of the credit note. Note:that when you click in this field, click in the Contact field you activate the contact picker dialog. Use this functionality to locate and select the client contact As company is most likely already populated, when you activate the contact picker dialog it will be pre-filtered to show only those contacts are associated to the Company.
Company	This field should be pre-populated, but it records the organisation to whom the credit note has been issued.
Invoice Number	This is an internal unique reference number for this record.,
Job Number	Depending on the reason for issuing the credit note, this is an optional field which allows you to record a job reference that the credit note is linked to. Functionally, when you click in this field, you activate the job picker dialog, which allows you to search for and select a job order to relate the credit note to. If you are using this functionality, click Select against the job you wish to relate the credit note to.
Job Name	The Job Name field automatically populates with a concatenation of the category and description fields from the corresponding job order that was set in the Job Number field.
Customer PO	If the credit note is related to a job order, the Customer PO field can be populated with the purchase order number from the customer which originated the related job order.
Customer Ref	Similarly, Customer Ref can be used to record the customer's internal reference for any order(s) that this credit note might relate to.
Address	The Address, Town, Country, Post Code and Country fields define the Billing Address as to where the credit note should be physically sent. They are automatically populated from the billing address field values held on the record for the Company Tip: You can manually overwrite these if necessary
Accounts Contact	You can use the select from the drop-down pick list the member of staff in the accounts department who is responsible for, and can be contact with any questions in regard of, the credit note.
Sales Contact	Used to record the salesperson responsible for the customer.
Date	This is automatically date stamped with the calendar date when the credit note is marked as ready. It cannot be user populated.
Type	This is automatically set with Credit Note
Job Name	By default, this field is populated with the value in the Job Name field. However, unlike Job Name, you can edit the contents of this field, and alter it if required.
Job Number	The Job Number field functions in an identical way to above, with the exception that values entered here backfill the Job Number field.

Once the headers have been populated, it should look something like this:-

In essence the process of populating the credit note details involves recording the amount of credit that is being issued to the customer, and how it originates. This will vary according by scenario and by your internal policies.

For example, if the credit note is issued as a form of refund, then you may wish to included at a very detailed level each item that your are refunding. For other scenarios, such as granting a customer an introductory credit amount, you may wish to record this very simply as just a description and credit value.

Irrespective, this detail is populated in the Credit Note's Invoice Lines tab in the form of item description, quantity of items, item prices, which will generate a total credit value.

Conceptually, this is identical to manually adding a charge on an invoice with the key exception that the total amount is not a charge, but a credit to the customer, and thus can be used to offset future debts.

by default, there will be a single blank row in the Invoice Lines tab that will require populating.(use the new record icon to add more if needed)
Populate the data fields as follows:-

Field	Comments
SKU	If relevant, populate with the internal reference number for the item. Note: SKU makes sense to include if the chargeable element that you are including is a product or service that has a definitive stock keeping reference number
Customer SKU	As per SKU, but the reference number from the customer's perspective.
Description	This is the textual field describing the element that the credit refers to. This should definitely be populated with meaningful content that the customer can understand.
Nominal Code	This reference number can be used as a cross reference for sales data to your accounts package. . Nominal codes are defined in system settings.
Type	This represents the category of the chargeable element that is being credited. You should select the applicable type from the drop down list.
VAT rate	The VAT rate is defined in system settings. By default,when a blank row is added, VAT is deemed eligible. You can manually amend this if required. Note: Numerics entered here are interpreted as percentages. Hence input of 0.175 is parsed as 17.5%
Unit Cost	This relates to the internal cost per unit of item being credited. It is not exposed on the customer facing invoice.
Total Cost	System calculated and not user editable. (Quantity Produced * Unit Cost)
Unit Gross Profit	System calculated and not user editable (Unit Price - Unit Cost)
Total Gross Profit	System calculated and not user editable (Quantity Produced * Unit Cost Profit)
Quantity Produced	This must be populated. It records how many units of the item will be credited to the customer. It must be entered with negative signage to denote that it is a credit.
Unit Price	This must be populated. It records the value of each unit of the item that is being credited to the customer
Total Price	This is the total value of credit for this item. It is automatically calculated. (Quantity Produced * Unit Price) This should be a negative number. If it is not, check to ensure that you have entered Quantity Produced with negative signage.

Repeat Steps 9) to 10) if you wish to record multiple items on the credit note.
When you have finished the credit note should look something like this

Issuing a Credit Note to a Company

Background

Prerequisites

Procedure