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Credit Note › Help › Making it
Credit note against a sale or against a purchase
The question This note is against decides who owes whom. A credit note on the sale side lowers what your customer owes you. On the purchase side it records that you owe a supplier more.
Which side to pick
- Sale: customer owes you less. Goods returned to you, price reduced, discount after sale, short supply, tax charged in excess. Series CN/…; saved to the customer.
- Purchase: you owe the supplier more. Use it when you record a note for the supplier because the price or tax on their bill was charged short. Series PCN/…; saved to the supplier.
- Got a credit note FROM your supplier? That is the supplier lowering their bill (for example you sent goods back). Record your side as a debit note on the purchase side, or enter it in the App as a purchase return.
Worked example
| Case | Choose | Effect |
|---|---|---|
| Customer returns 10 units of ₹500 + 18% | Credit note, Sale | Customer owes ₹5,900 less |
| Supplier billed ₹30 instead of agreed ₹32 on 500 units | Credit note, Purchase | You owe ₹1,000 + GST more |
| You send 20 units back to a supplier | Debit note, Purchase | You owe less |
Common mistakes and how to fix them
- Choosing Sale for a supplier's note. The amount then lands on the wrong side of the books. Open it, switch to Purchase, save.
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Related help
Make a credit noteA credit note lowers an invoice already issued: goods returned, a price cut, a discount after the sale, or tax charged…Debit note to a supplierWhen you send goods back to a supplier, or they charged a rate or tax too high, you send them a debit note: you now owe…Purchase bills and returnsEvery bill from a supplier goes in as a purchase bill. It adds to what you owe, brings the goods into stock, and its…