This activity records the receipt of a credit note from your supplier and matches those details to the relevant purchase return. A credit note can be matched to several purchase returns where applicable. Depending on your system settings (see Match invoice and credit notes to on page 29), this is achieved using:
● A two-way match: the credit note is matched directly to the purchase return.
● A three-way match: the credit note is matched to the goods that have been despatched to your supplier, which in turn matches the credit note to the purchase return.
Recording a credit note involves:
● Selecting the supplier: all items that have been recorded for return to that supplier are displayed by return number, regardless of whether the return is on hold.
● Checking the credit note has not already been recorded: this is an optional activity but it is particularly useful to prevent recording a credit note twice. By entering the credit note reference and date the system checks for an existing record by matching this criteria. A warning is displayed if an existing record is found.
● Entering credit values: covering goods value and tax value, which represent the total credit note value. This is optional. It is intended to provide an additional control when entering credit note values. The system checks the total goods value and tax value match the cumulative values of the goods confirmed as credited.
● Marking the goods and/or services as credited: this is achieved by selecting the item and accepting or amending the expected credit quantity or item price, which are derived from the purchase return. If you are using a three-way match, you have the option to select a despatch for the item and mark it as credited, this also marks the associated item as credited (item
Note: As service/labour items and free text items are not subject to despatch you can only perform a two-way match for such items.
Note: You cannot record a credit note for a supplier if the supplier's account is on hold.
Discrepancies between the credit note and the purchase return or even the record of goods despatched to your supplier can occur. As you record a credit note, discrepancies are
highlighted. In certain cases the discrepancies may prevent you from recording the credit note.
If you have set your system to use disputed invoice processing (see Disputed invoices on page 30), then you have the added flexibility to record such credit notes and mark them as disputed.
While the credit note is marked as disputed no update to other modules is made. This means there will be no evidence of the credit note being received in either the Purchase Ledger or Nominal Ledger. Update only occurs once the credit note dispute is resolved. For more information see Manage Disputed Credit Notes on page 194.
When dealing with:
● A price difference (increase or decrease), you can enter the buying price specified on the credit note and accept the discrepancy or mark the credit note as disputed (provided your system is set to process disputed credit notes).
● A quantity lower than the return quantity, this may indicate some or all of the goods have not been returned to your supplier, a warning is displayed but you can continue to submit the credit note.
● A credit note quantity that exceeds the despatched quantity, you can enter the credit quantity and accept the discrepancy or mark the credit note as disputed provided your system is set to process disputed credit notes.
● Credited goods or services not specified in the purchase return, then the purchase return must be amended before the credit note can be matched successfully.
Note: Price and credit values are displayed in the supplier's currency.
Note: Three-way match only (credit note matched to the GRN): if you accept a credit note and you have not yet returned the goods to your supplier, when the items are despatched the system will automatically mark the GRN as credited.
Note: If you are using a three-way match, the total credited GRN quantity cannot exceed the item's credited quantity.
Provided a credit note is not marked as disputed, recording it as received results in an update to:
● The credited quantities on the purchase return.
● The supplier record to indicate a credit note has been received.
● The Nominal Ledger. The balance sheet nominal accounts for creditor control and tax control are both updated.
Postings are also made to a third nominal account. The nominal account updated depends on the item type used to specify the goods or services in the original purchase return. For item types, 'stock' and 'miscellaneous', the default nominal code set up on the item is used. For service/labour items or goods/services specified using free text items in the purchase return, the default nominal account set up on the supplier's account is used. However, if you amend the displayed default nominal account then the posting is made to the nominal account selected as the credit note is entered.
● The tax file.
Record a credit note two-way match
The process of recording a supplier credit note where the credit note is matched to the purchase return to determine if it should be accepted or queried. If discrepancies are found you can record the credit note details and mark it as disputed, (provided your system is set to process disputed credit notes). For more information see Disputed invoices on page 30.
Unlike disputed invoices, there is a limit to what you can do with a disputed credit note. You can accept or post a disputed credit note or delete it. You cannot amend a credit note even when it is marked as disputed. For more information see your Sage 200 Purchase Ledger User Guide.
Recording a credit note as received can be carried out by several people at the same time provided they are not recording credit notes for the same supplier.
Note: As service/labour items and free text items are not subject to despatch, you can only perform a two-way match for such items.
To record a credit note using a two-way match
When recording a credit note using a two-way match, work in the 'Select return items to match to credit note' section of the purchase order credit note record.
● Choose Order Processing > Record Purchase Credit Notes.
● Select the supplier using the drop-down lists.
● Accept or amend the displayed credit note date.
● If you are dealing with a foreign currency supplier, accept or amend the displayed exchange rate. The system displays the exchange rate for the supplier's currency specified in the exchange rate table.
● Check if the credit note has already been recorded (optional). To do this, enter the credit note reference and click 'Check'. If the credit note date and reference are not unique a warning is displayed.
Note: Use 'Find' to search for an item in the displayed list and use 'View Return' to display full details of a purchase return during this activity.
● Enter the credit note goods and tax values expressed to two decimal places (optional).
● Select the item from those displayed in the 'Select return items to match to credit note' section of the window.
● To mark the item as credited, select the check box located to the left of the item's return number.
● Accept or amend the credit quantity displayed in the 'Qty to be Credited' column.
● Accept or amend the unit price displayed in the 'Discounted Unit Price' column.
● Continue to select and confirm items by quantity and price.
● Before you save the credit note check the information. If you are using disputed credit note processing and you want to put the credit note on hold, mark it as disputed (see Mark credit note as disputed on page 192).
● To accept and post the credit note click 'Post Credit Note' and the 'Enter Purchase Credit Note' window appears. The window is populated with the values you have entered.
● Use the 'Enter Purchase Credit Note' window to amend tax values, nominal accounts where required. You cannot amend the exchange rate.
Record a credit note using a three-way match
The process of recording a supplier credit note where the credit note is matched to goods that have been despatched to the supplier, which in turn matches the credit note to the purchase return. This determines if the credit note should be accepted or queried. If discrepancies are found, you can record the credit note details and mark it as disputed, (provided your system is set to process disputed credit notes). For more information see Disputed invoices on page 30.
Unlike disputed invoices, there is a limit to what you can do with a disputed credit note. You can accept or post a disputed credit note or delete it. You cannot amend a credit note even when it is marked as disputed. It may be possible to reverse a posted credit note in the Purchase Ledger.
For more information see your Sage 200 Purchase Ledger User Guide.
To record a credit note using a three-way match
When recording a credit note using a three-way match, work in both the 'Select return items to match to credit note' section of the purchase order credit note record as well as the 'GRNs for return item' section.
● Choose Order Processing > Record Purchase Credit Notes.
● Select the supplier using the drop-down lists.
● Accept or amend the displayed credit note date.
● If you are dealing with a foreign currency supplier, accept or amend the displayed exchange rate. The system displays the exchange rate for the supplier's currency specified in the exchange rate table.
Note: Use 'Find' to search for an item in the displayed list and use 'View Return' to display full details of a purchase return during this activity.
● Check if the credit note has already been recorded (optional). To do this, enter the credit note reference and click 'Check'. If the credit note date and reference are not unique a warning is displayed.
● Enter the credit note goods and tax values, expressed to two decimal places (optional).
● Select the item from those displayed in the 'Select return items to match to credit note' section of the window.
● To mark the item as credited, select the check box located to the left of the item.
● Accept or amend the credited quantity displayed in the 'Qty to be Credited' column.
● Accept or amend the unit price displayed in the 'Discounted Unit Price' column.
● Match the associated despatches to the item by selecting a despatch from those displayed in the GRNs for return item section of the window and select the check box located to the left of the despatch. Then accept or amend the quantity displayed in the 'Qty to be Credited' column. Continue to match despatches to the item.
● Continue to select and mark items and associated despatches as credited.
● Before you save the credit note, check the information. If you are using disputed credit note processing and you want to put the credit note on hold mark it as disputed. For more information see Mark credit note as disputed on page 192.
● To accept and post the credit note click 'Post Credit Note' and the 'Enter Purchase Credit Note' window appears. The window is populated with the values you have entered.
● Use the 'Enter Purchase Credit Note' window to amend tax values and nominal accounts where required. You cannot amend the exchange rate.
Mark credit note as disputed
Note: The total GRN quantity (quantity despatched) for an item cannot exceed the return item quantity.
This means there will be no evidence of the credit note being received in either the Purchase Ledger or Nominal Ledger. Update only occurs once the credit note dispute is resolved. See Manage Disputed Credit Notes on page 194.
To mark a credit note as disputed
● On the credit note record click 'Dispute Credit Note'. The 'Dispute Detail' window is displayed.
● Select the dispute code from the drop-down list.
● Enter further comments in the 'Dispute comment' box (optional).
● Click 'OK'. The item is marked as disputed and you return to the credit note record.
Note: Disputed credit notes cannot be amended.