How to Record a Purchase Credit NoteIf your supplier credits your account (eg. for returning faulty goods), you need to create a purchase credit note. This purchase credit note can later be allocated to a purchase or paid as a refund.
To create a purchase credit note, click menu File > New > Credit Note.
Change the Document Type to 'Purchase Credit Note':
Enter the details of the credit note into the following fields:
- Supplier: The name of your supplier.
- ID: A unique number for your records.
- Supplier Credit No: The number assigned by the supplier. Can be left blank.
- Date: The date of the credit note.
- Qty: The quantity of goods or services returned (e.g. 15 kilograms or 8 hours).
- Description: The 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: The account used to keep track of the credit. This is usually the
same account that was used when recording the original purchase.
- VAT Column (only shown if registered for VAT): The rate of VAT
your supplier is crediting, as shown on the credit note.
- Unit Price: This is the price your supplier is crediting per unit of goods or
services (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: Any comment that appears on the credit note.
- 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 purchase.
- Journal Memo: A description of this credit note to appear in your transaction list.
- Paid Today (only shown for new credit notes): If you received a refund from the supplier on the
date of the credit note, enter the amount received 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
received from the supplier or applied to another purchase.
- Balance: The balance remaining – this is the amount which is yet to be refunded or applied to another purchase.
After you've created a purchase credit note, you should record a supplier refund or allocate the credit to an invoice.