About Credit/Debit Notes

Use the O/E Credit/Debit Note Entry screen to enter credit notes and debit notes for existing invoices, as well as for invoices that have been cleared or are not yet entered in your system.

You enter credit notes or debit notes to:

• Credit a customer's account for returned merchandise, damaged items, or price reductions
• Correct an error on an invoice (debit or credit)
• Post a debit or a credit for a miscellaneous charge

You can credit an entire invoice or part of an invoice.

Important! All Order Entry credit notes and debit notes affect sales amounts. If you do not want to affect any Order Entry or Inventory Control amounts or statistics, enter the credit note in Accounts Receivable.

Note: You cannot post a credit note for documents that use the Project Invoicing option. To effect credit note functionality for job-related invoices, you can enter negative shipments for job-related documents.

Choosing Credit Types for Credit Notes

When you enter a credit note, you must select one of the following credit types for each invoice detail you are crediting:

• Items Returned to Inventory More...

  If you select the Items Returned to Inventory credit type, you enter the number of units returned to inventory in the Quantity field. The program calculates the extended amount (quantity returned multiplied by price).

  If you selected an existing invoice number, the program displays the cost of the sold item. If the invoice number was blank or non-existent, the program displays a unit cost based on the item's costing method. More...

  The costing method can be one of the following:

  • Most Recent Cost
  • Standard Cost
  • Average cost—for Average, LIFO, and FIFO costing methods

  You can edit any item fields that are not dimmed – for example, the price or the extended amount.

  Quantities on hand in Inventory Control are adjusted when you post the credit note.

• Damaged Items More...

  If you select the Damaged Items credit type, you enter the number of units damaged in the Quantity field. The program then calculates and displays the extended price for this quantity.

  Damaged items do not affect inventory levels, but they do affect item sales.

  You can edit any item fields that are not dimmed.

• Price Adjustment (increases or decreases) More...

  If you select the Price Adjustment credit type, you enter the price adjustment in the Price/Adjustment field, as follows:

  • Enter a decrease as a positive number.
  • Enter an increase as a negative number.

  Note: You can enter a detail line with a negative amount, but you cannot post a credit note or a debit note with a negative total amount.

  When you enter the adjustment, the program calculates and displays the extended price adjustment in the Extended Amount field. The program multiplies the adjustment by the quantity to determine the adjustment for the detail line.

  Price adjustments affect the item sales amount.

Entering Credit Notes Against Non-Existent Invoices

If you are entering a credit note against a non-existent invoice:

• The average cost will be displayed for items using average costing, FIFO, and LIFO.
• The most recent cost will be displayed for items using most recent cost.
• The standard cost will be displayed for items using standard costing.

You can edit the cost before posting the return.

Crediting Part of an Invoice

If you do not want to credit an entire invoice, or if you need to change the numbers or amounts for invoice details, use the Detail table.

You can delete lines for details you do not want to credit, and insert lines for items or miscellaneous charges you want to credit for the invoice.

When You Post a Credit Note or a Debit Note

During posting, Order Entry assigns the credit note or debit note number using the prefix and next number specified on the O/E Options screen. In addition:

• Items returned to inventory. When you post a credit note for items returned to inventory, the quantities on hand in Inventory Control are immediately increased for the items on the credit note.
• Day End Processing. If you keep sales statistics, the quantity sold, sales amount, invoice amount, and item cost of sales are updated when you run Day End Processing in Inventory Control. If you keep sales history, the number of returns and the returned amount are updated. When you post a credit note for a returned item to which serial numbers were assigned, the serial numbers are reported on the Serial Numbers List in Inventory Control.
• Damaged items. If you post a credit note for damaged items, there is no effect on the quantity on hand or on costs. Damaged items update sales statistics and history after Day End Processing, just as items returned to inventory do.
• Price adjustments. If you post a credit note or a debit note as a price adjustment, there is no effect on the quantity on hand or on costs. The item sales and invoice amounts are updated when you run Day End Processing, but the number of returns and the returned amounts are not.
• Sales commissions. If your salespeople earn commissions, credit notes posted against invoices reduce the commission earned accordingly. The recalculation of commissions is done during Day End Processing.

Importing Debit Notes and Credit Notes

You use the Import command on the File menu in the Credit/Debit Note Entry screen to import debit notes and credit notes.

You can import the same debit note or credit note any number of times. The original credit information is retained until you delete it from the program in which you created the import file.

Kit components, Serial numbers and Lot numbers

You cannot import serial numbers or lot numbers for kit components.

Tip: You can use a macro to automate the entry of serial numbers and lot numbers for kit components.

Multicurrency Ledgers

You cannot import multicurrency debit notes or credit notes into a single-currency Order Entry system. If necessary, edit the import file to remove the multicurrency field before importing.

For more information about importing, see the help for System Manager.