Creating a credit note for inventory items (purchase invoices)

Important When entering credit note for inventory items, it is important to note that in order for inventory accounting to function correctly, the credit note must be created from the original invoice. This is necessary to ensure that the returned goods are assigned the correct cost price. In SimplBooks, it is not possible to manually select batches (and their associated cost prices), so this should be kept in mind.

To create a credit note, first open the invoice through which the item was entered into the inventory. If the invoice number is not known, you can find it under inventory movements by using the item filter.

Inventory -> Movements, select the period and add the item filter

Now you can see the item’s movements during the selected period.

By clicking on the source document (“purchase invoice”), you will be taken directly to the purchase invoice view.
From the Actions menu, select Create credit invoice.

The credit note will be created with the exact same quantities and prices as the original purchase invoice. If the credit note is not for all the goods, you can now adjust the correct returned quantities and remove any unnecessary lines.

The quantity of goods is always a positive number, and the minus sign appears in front of the amount.

When a credit note is saved, an expense is created, and both the quantity of goods and the financial inventory balance decrease.
How to solve the situation when one credit note includes goods from multiple purchase invoices? Click here to read more below

If a supplier’s credit note includes goods returned from several different purchase invoices, the simplest solution is to write off the returned goods and enter the credit invoice without items.

Warehouse -> Documents -> New document -> Inventory write-off

  1. Select the credit invoice date.
  2. Select the correct warehouse (if multiple warehouses are in use).
  3. Add a new line = choose the article and enter the quantity.
  4. It’s recommended to write the supplier’s credit note number in the description field, to easily identify the reason for the write-off.

This will remove the goods from the inventory and create an expense entry (Debit 50×0 Cost of Goods, Credit 164x Inventory).

Enter the supplier’s credit note under purchase invoices. Instead of adding items to the invoice, mark the expense account (50×0) on the line. The quantity should be 1, and the total amount should be entered as negative in the sum field. Since the amount is negative, it will appear on the credit side of the entry, effectively canceling out the expense created by the write-off.

Important Be sure to review the totals on the document. If goods were purchased at different cost prices, there may be differences in the expense account, either increasing or decreasing the cost.
For example: If the returned goods were valued at €120, and the write-off was recorded at €125, the expense will increase by €5. If the amounts were reversed, the expense would decrease.

For additional questions, please write to us support@simplbooks.ee.

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