Sales Credit Notes

The Sales Credit Notes module manages issuing financial credit adjustments to customers for product returns, commercial discounts, price corrections, and goodwill credits.

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Credit Note Accounting & Allocations

flowchart TD
    A[Credit Note Created & Posted] --> B[General Ledger Posting]
    B --> C[Debit: Sales Revenue / Returns Allowance]
    B --> D[Debit: Output Tax / GST Payable]
    B --> E[Credit: Accounts Receivable Control Account]

    A --> F{Credit Note Settlement}
    F -->|Offset Open Invoices| G[Allocate Credit to Outstanding Invoices]
    F -->|Cash Refund| H[Process Customer Bank/Card Refund]
    F -->|Store Credit| I[Retain as Unallocated Credit Balance]

1. General Ledger Reversal Posting

Posting a Credit Note reduces revenue and customer AR debt:

Debit:  Sales Revenue / Returns Allowance  (Net Credit Amount)
Debit:  Output Tax / GST Payable           (Refunded Tax Total)
Credit: Accounts Receivable Control        (Total Gross Credit)

2. Credit Allocation vs. Cash Refunds

• Invoice Allocation: Credit notes can be matched and allocated directly against open customer invoices in the subledger without generating secondary GL entries.
• Cash Refund: If a customer requests cash return rather than store credit, a customer_refund payment entry debits Accounts Receivable and credits the Bank Account.

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Step-by-Step Workflows

1. Creating and Posting a Credit Note

1. Go to Sales → Credit Notes (/sales-credit-notes).
2. Click Create Credit Note to open the creation drawer slide-over.
3. Select the Customer and optional originating Sales Invoice / Return.
4. Add line items, reason codes, and credit values.
5. Click Post Credit Note to commit to the General Ledger.
6. In the allocation tab, apply the credit note across outstanding customer invoices or leave as an open unallocated credit.

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Field Reference

Field	Description
Credit Note Number	Legal reference (CRN-...).
Customer	Debtor account receiving credit.
Gross Total	Total credit value including tax.
Unallocated Balance	Open credit balance remaining for future use.
Reason Code	Commercial cause (Return, Billing Error, Damaged in Transit, Goodwill).