How to Credit a Customer AccountIf a customer returns faulty goods or you wish to credit their account for any other reason, you need to create a credit note. This credit note can later be allocated to a sale or paid out as a refund.
The simplest way to create a credit note is to edit an existing invoice and click More Options > Copy To Credit Note. (f you want to create an credit note that doesn't relate to an existing invoice in Solar Accounts click menu File > New > Credit Note). The Credit Note window will appear:
Enter the details of the credit note into the following fields:
- Customer: The name of your customer.
- Credit No: The identifying number you want to use to refer to this credit note.
Note that you can change the default number sequence.
- Customer PO No: The purchase order number which the customer uses to refer
to their order. Can be left blank if the customer hasn't given you an order number.
- Date: The date you issued the credit note.
- Qty: The quantity of goods or services returned (e.g. 15 kilograms or 8 hours).
- Description: A reason why the account is being credited.
To enter a long description with multiple lines, click the ellipsis ('...') button
to the right of the current description field.
- Account: This is the account used to keep track of your sales, usually 'Sales Income'. A credit note will reduce
the balance of this sales account.
- VAT Column (only shown if registered for VAT): This is the rate of VAT
you charged your customer when you made the sale. This is usually 20%,
but there are exceptions
– if you're not sure of the correct rate, talk to your accountant or
call the HMRC National Advice Service on 0845 010 9000.
- Unit Price: This is the price you charge per unit of goods or
services refunded (e.g. £4.70 per kilogram or £40 per hour)
- Line Total: The total amount for the credit note line –
automatically calculated as Quantity multiplied by Unit Price.
- Prices Include VAT: By default, the Unit Price and Line Total
amounts do not include VAT. Tick this box if you prefer to enter the amounts
- Comment: A comment that will appear on the credit note. You should enter details of the
original sale related to this credit (ie. invoice number and date).
- Subtotal: The total of all credit note lines.
- VAT: The total VAT included in the credit amount.
- Total: The total credit amount.
- More Options > VAT Treatment (only shown if registered for VAT): This list determines
how your credit note will affect your VAT return. Select the option which best describes
the original sale.
- Journal Memo: A description of this credit note to appear in your transaction list.
- Paid Today (only shown for new credit notes): If you paid a refund to the customer on the
date of the credit note, enter the amount paid here. This will create a new refund
transaction associated with this credit note.
- Paid or Applied (only shown for existing credit notes): This is the total amount
paid to the customer or applied to another sale.
- Balance: The balance remaining – this is the amount which is yet to be refunded or applied to another sale.
Once you've created a credit note, you should pay a refund or allocate the credit to an invoice.