Allocating Credit Note and Payment

Allocating Credit Note and Payment

Question: There are customers who return merchandise after the invoice has been paid. As is customary, we generate a credit note. Sometimes, however, there are no open invoices to which we can apply the credit note. So, in this case, we will need to pay customers back. How can I record transactions that do not result in negative credit on list invoices?

Answer

Using the steps provided below, you should be able to handle this particular scenario.

1.Create a Credit Note against an invoice first.

2.Create a Payment Entry for the amount returned

3.Utilize payment reconciliation to deduct Payment from the initial Sales Invoice (and not the Credit Note itself).

For a similar scenario involving a Purchase cycle and the creation of a debit note in the system, the following steps would apply:

1.First, create a Debit Note against the Purchase invoice in the system.

2.Create a Payment entry for the amount returned

3.Utilize payment reconciliation to deduct Payment from the initial Purchase Invoice (and not the Debit Note itself).