Record customer credit notes

• The customer's account balance is reduced by the gross value (including VAT, if appropriate) of the credit note.
• The account's turnover for this period (or for the next, if a future period's date is entered) is decreased by the net amount (goods value) of the credit note.
• The sales account(s) (profit and loss) in the Nominal Ledger are debited with the goods value according to the analysis.
• The tax output account(s) (for the balance sheet) in the Nominal Ledger are debited with the value of the VAT if included.
• The debtors control nominal account (for the balance sheet) in the Nominal Ledger is credited with the gross value of the credit note.
• The VAT file is updated with the goods and VAT value for each VAT rate used. The entry is made for the current ledger period, unless the posting is for a future period when the appropriate month is used. This ensures that transactions entered late, after the month has been closed, are included in the next VAT Return.

Open: Sales Ledger > Enter Transactions > Credit Note.

1. Select the customer account you want to add a credit note to.

2. If the customer's account is in a different currency, accept or amend the Exchange rate.

   You can only change the exchange rate if the exchange rate is set to be amendable in Accounting System Manager.

3. Enter the credit note details and amend default values where required.
• To check that the Reference and Date combination is unique, click the button.
4. Enter the Transaction details, Goods value, Discount percent, Discount days and Discount value.

Note: When settlement discount is entered, VAT is calculated on the Goods value less the Discount value. If the Country code on the customer record is the Republic of Ireland (country code IE) then the VAT is calculated at the goods value regardless of any settlement discount.

5. If the customer's account is in a different EU currency and the credit note is a triangulated transaction, select Triangulated. This makes sure that the transaction is marked with the correct indicator on the EC Sales list.

6. If required, enter the Project Analysis details for each item on the credit note.

   The Project Analysis tab is only available if you are using the Project Accounting module.

7. Accept or amend the Tax analysis (VAT) for each item on the sales credit note.

   If you are working with goods items which have different tax (VAT) rates applied to them, ensure the tax value in the tax analysis matches the tax value (VAT) for the transaction.

8. Accept or amend the Nominal analysis requirements for each item on the credit note.

   You can change the Narrative to make it more meaningful for your business.

   Both positive and negative values can be entered in the Goods Value for nominal analysis.

9. Click Save, to store the credit note.

   Click Save and Retain A/C ref to save the credit note but retain the customer account. This means that you can record another credit note for the same customer.

Open: Enter Transactions > Free Text Credit Note.

1. Select the customer account you want to add a credit note to.
2. Enter the Credit note header details.

   • Their reference

   • Credit note date

     Enter the credit note date.

   • Exchange rate

     If required, change the exchange rate if the credit note is for a foreign currency customer.

     Note: You can only change the exchange rate if the currency is set to be amendable on the Settings tab of Currencies & Exchange Rates in Accounting System Manager.

   • Triangulated

     Select this if the invoice is for a EU currency customer and it is a triangulated transaction. This makes sure that the transaction is marked with the correct indicator on the EC Sales list.

3. Enter the Credit note details.

   • Description
   • Quantity
   • Unit Price
   • VAT Code
   • Line Total

   The Credit note totals are calculated automatically.

   • Select the Show tax analysis check box if you want to check the VAT analysis for the transactions.

4. If required, you can change the Nominal Account using the drop-down list.

   The nominal account specified on the customer account is displayed by default.

   Note: If the nominal account is not a valid account, a warning message will appear. If you continue with the posting without changing the nominal account, the invoice will be posted to the suspense account.

5. Click Save.