Adjustment notes, credit notes, and refunds are issued to customers for damaged, returned or undelivered goods. Customers may elect to receive a refund immediately or take the refund payable as a credit on their account (commonly used for overpayments). It depends on your regulatory requirements and your organisation’s policy and procedures regarding returns.
The video below also explains what happens when a customer overpaid a sale and how to handle that overpayment.
Create a refund for a sale
Example: The customer finds the goods delivered to be slightly damaged. So you offer and they accept a $100 credit.
- Duplicate the original sale transaction you are refunding and under the Type drop-down list, Select Adjustment Note, Credit Note (or another choice appropriate for your tax zone).
- Set the transaction date as the day you had the goods returned and remove any line items in this duplicated transaction that aren’t being returned.
- Change the sign to negative for all line items in the invoice but do this for the;
– Amount field if this is a Service invoice.
– Quantity field if it is an Item invoice.
- Take EITHER of these actions, depending on whether or not you are providing a cash refund:
- Apply a payment if refunding the customer immediately.
- Leave it as unpaid to leave the customer’s account in credit.
- After saving the transaction you can print or email it as required.
Example of a credit/adjustment note:
Use a credit against a future sale transaction
Example: Your customer needs to pay a $2000 invoice with you but you/they know they have a $100 credit on their account so they only pay you $1900
- Go to Add > Sales Payment
- In the Applied to Invoices section select the client from the Contact Pick List and click [Show] to view all outstanding payments with that contact.
- Enter the amount for the Credit/Adjustment Note still not settled in the list. Note it might have a negative sign. e.g. -$100 in the example below.
- Enter the amount for the earlier Credit/Adjustment Note you will apply against the new transaction just created in this list. e.g. $100 in the example below.
- Ensure the date, bank account and other information in this screen are correct and click [Save] to finalise the Sales Payment.
Alternatively you can select Sales and select your client before clicking Show. You can then use the tick box to select both transactions and select Pay. Then continue with the steps as above to enter your date, bank account etc.
Example of a Sales Payment closing out an earlier Credit/Adjustment Note:
Receive a supplier credit/refund for a purchase
Example: The supplier has offered a supplier credit note of $50 to be applied to your (future) purchase.
- Go to Add > Purchase to create a supplier credit note for the amount you are offered as supplier credit and under the Type drop-down list, Select Adjustment Note, Credit Note (or another choice appropriate for your tax zone).
- Select the service layout, and enter the details such as summary, contact details, description.
- The amount should be in negative, so enter -50 in this example and save the adjustment note.
- Take EITHER of these actions:
- Apply a payment if you already received the credit from the supplier.
- Leave the credit note as unpaid if this will be applied against a purchase.
Example: You are returning defective/unwanted goods back to the supplier.
- Find the original purchase order and create a duplicate. For transaction date, use the date that you are returning the goods to the supplier.
- Remove any line items in this duplicated transaction that aren’t being returned.
- Change the sign to negative for all line items in the invoice. Do this for the:
- Amount field if this is a Service invoice.
- Quantity field if it is an Item invoice.
- Save the transaction.
- Take EITHER of these actions:
- If the original purchase order is still unpaid, go to the purchase screen to see the list of unpaid purchases. Then, select both the original purchase order and supplier adjustment note and click on ‘Pay’ to apply these to each other.
- If the original purchase order is already paid, mark the adjustment note as paid when you receive the supplier refund.