Creating a Credit Note from a Sales Invoice

Once a sales invoice has been posted, you can use it to begin to create a credit note. The document created by the conversion inherits many of the original invoice details, including its currency and tax details, its analysis dimensionsCustom objects that allow you to analyze the activity in your business in additional ways, such as by cost center, project, employee, or any other business entity important to you., and any values in custom fields that have been set up for sub-analysis mappingMapping of custom fields at header and line level for the purpose of profitability reporting..

If the invoice was created from an opportunity, a reference to this opportunity is retained. You can then amend the details, add or remove lines and so on, before saving.

To create a credit note from an existing sales invoice:

1. Locate and retrieve the details of the sales invoice that you want to convert. See Viewing Sales Invoice Lists for more information.
2. Click Convert to Credit Note. If you can't see this button, contact your administrator.

   This creates the template for a new credit note using the details of the selected sales invoice.

3. Amend the sales credit note details, as required.
4. Specify a reason for issuing the sales credit note.
5. Add, amend or remove credit note line items, as required.
6. Click Save to create an "In Progress" credit note.

If the invoice has an income scheduleUsed to spread the income (revenue) from a sales invoice across a range of accounting periods. attached, this will not be canceled by the conversion to a credit note. For more information on what to do in this situation, see Crediting a Sales Invoice with a Schedule.

Note:

Note

The Convert to Credit Note button is not available if the sales invoice was created in FinancialForce Accounting v9 (or earlier) and the account's Account Trading Currency specified at V10 (or later) is different from the account's Account Currency.

Converting an intercompany sales invoice to a credit note

If the sales invoice is associated with an intercompany accountA special account used in intercompany transactions. To create an intercompany account, link it to the company details of the destination company., then when the sales credit note is posted, an intercompany transferObject used as a staging location for data used when transferring costs to other companies in the same organization. record is created. The account line on the transaction will use the accounts receivable GLA from the related intercompany definitionDefines the intercompany control accounts to use when transferring costs between companies in the same organization. not the accounts receivable control GLA from the account.

When you process this intercompany transfer, a payable credit note is created in the destination companyCompany that receives the costs during an intercompany transaction..

When you post this payable credit note, the account line on the transaction will use the accounts payable GLA from the related intercompany definitionDefines the intercompany control accounts to use when transferring costs between companies in the same organization. not the accounts payable GLA from the account.

Note:

Note

The same process is followed when you credit a sales invoice manually. That is when you create a credit note manually using an intercompany account.

Automatically matching a credit note to its associated sales invoice

When you create a credit note by clicking the Convert to Credit Note button, you can automatically post and match the credit note to its associated sales invoice using the Post & Match button. This button is only available if the Invoice Number field is populated on the credit note, and the invoice is unmatched.

When you click the Post & Match button:

• If the sales invoice and credit note fully match each other, the invoice's Match Type will be set to "Credited" to indicate that it has been fully matched to a credit note.
• If the credit note value is less than the sales invoice value, the invoice will be part matched. You must match the documents manually if you want to apply a discount or write-off.
• If the credit note value is greater than the sales invoice value, an error message will be displayed and you will remain on the sales credit note detail page so that you can amend the credit note value. If the credit note value is intentionally greater than the invoice value, you must match the documents manually.

When the sales invoice and credit note match successfully, a matching reference is created and the Matched Payments list on each document is updated in the usual way. Any currency differences are handled automatically by the creation of currency write-off journals. Documents matched using the Post & Match button can be unmatched in the usual way.

Note:

Note

If the credit note fails to post, you will remain on the sales credit note detail page so that you can correct the credit note details. If the credit note posts successfully but fails to match the invoice, the Cash Matching tab will be displayed so that you can resolve the match manually.

When the credit note qualifies for background posting

If the credit note qualifies for background posting (because it has more than 80 lines or its tax value is calculated by AvaTax), when you click the Post & Match button its status will change to "Ready to Post & Match" and it will be picked up for posting next time the background posting scheduler runs. Once the credit note has posted successfully, it will be matched to its associated sales invoice. You will be notified of the success or failure of the action.

If the match fails for any reason, the status of the credit note is rolled back to "In Progress" so that you can discard it if required.