About purchase credit note processing

Introduction

To create a purchase credit note, you can either account for a supplier's credit note or use it as a clearing document to correct errors on an existing invoice or credit adjustment.

A purchase credit note can be created as a request for a supplier refund or it can be directly applied against invoices or credit adjustments.

To add a purchase credit note, go to the Purchase invoices (AP301000) window.

A purchase credit note needs at least one line. When adding a document, include all details from the original supplier document.

When first saved, a purchase credit note gets a unique identifier for easy tracking. This identifier is created based on the number series for debit adjustments in the Supplier ledger preferences (AP101000) window.

A purchase credit note usually does not link directly to an invoice or similar document. But, you can add a reference to the first document (like an invoice or prepayment) in the purchase credit note's description. Also, add a reference to the related supplier document in the Supplier reference field. If the Raise an error on duplicate supplier reference number option is not turned on in the Supplier ledger preferences (AP101000) window, you can use the same reference number for the invoice and the matching purchase credit note. This makes finding both documents easier.

Each purchase credit note has one of the following statuses, indicating its stage in processing:

Status Description
On hold Typically used for drafts.
This is the default status for new documents if the Hold documents on entry check box is selected in the Supplier ledger preferences (AP101000) window. A purchase credit note with the On hold status can be edited.
Balanced A Balanced adjustment can be saved only if it remains balanced after editing.
If the Validate document totals on entry option is selected in the Supplier ledger preferences (AP101000) window, you can take a purchase credit note off hold only if you correctly enter the document control total.
Open

This status indicates that the document has been released and can be applied against invoices and credit adjustments.
The status remains Open until the unapplied balance becomes zero.
Closed

This status signifies that the unapplied balance of the document is zero.

To release many purchase credit notes at once, use the Release supplier documents (AP501000) window. To release them one by one, use the Purchase invoices (AP301000) window.

Please note that cash discounts cannot be applied to purchase credit notes.

You can match released purchase credit notes against any invoices and credit adjustments from the same supplier, or use to offset supplier refunds.

These credit notes appear in the Customer payments (AR302000) window, where you can apply them against credit adjustments and invoices.

When you create a supplier ledger payment and load the documents to be paid, the purchase credit notes appear at the top of the list so that you do not forget to apply them.

A supplier refund is a payment for a purchase credit note.

  • When you receive a refund from a supplier, enter it into the system and create a purchase credit note for the same amount and supplier.

  • Pay for this purchase credit note using the supplier refund.

  • Once the supplier refund is applied and released against the purchase credit note, both documents are considered closed.

Relationship table links