What are Supplier Credits?
A supplier credits are credits that you receive from your supplier. Basicallly, it is the cash
that the supplier owes you. Supplier credits helps you record and keep track of the money you're
owed. This can be paid by your supplier by paying in the later date or by deducting it from your
future purchase to them.
A supplier credits can be recorded if:
1. You purchase items to your supplier but to your surprise, some of the items you receive have damages or
are not working. Instead of returning the payment for the items, you may issue a credit note to the supplier
and use the credit to the next invoice that will be sent to you by the supplier.
2. You pay your supplier in advance but the amount charged on your purchase is lesser than the amount you paid.
Instead of returning the excess payment, you may simply record it as supplier credit and use the credit for your
next transaction to your supplier.
Creating Supplier Credits
Go to Expense tab and select Supplier Credits.
Click Add New Supplier Credits
A pop-up form will appear.
Select the Supplier.
Select the Branch.
Enter the Transaction Date.
Enter a Credit Note No. for reference to the supplier credit that you're creating.
Select the Item in which the credits occured.
Select an Account where you want to track the credit.
Select Branch of your company.
Refer to the invoice given by the supplier for the Quantity, Rate
and Amount of the item.
Approving Supplier Credits
- Mark the checkbox of the supplier credits row that you want to approve.
Click Bulk Action and click Approve. The approval level depends on the number authorization level that
Go to Company Setup > Default Settings
, head to the System Preference
tab to enable/disable the approval for Credit Note.
Learn more about Approval
Using Supplier Credits
Apply to Accounts Payable Vouchers (APVs)
Supplier credits can be applied to AP Vouchers of the supplier you created the credit note for.
To do this,
- Click the gear icon of the supplier credits row and click Apply to APVs
- A list of vouchers assigned to the selected supplier is displayed. Select a particular voucher.
- Indicate the amount to be applied.
Supplier credits will be in a Closed status, once you have used up all the credits.
Supplier credits can also be use when supplier decided to pay the money he owed directly to you.
To record this,
- Click the gear icon of the supplier credits row and click Refund
- A pop-up modal will appear.
- Specify the Bank and the Bank Account you want to record the payment.
- Specify the amount to be refunded and provide a Particular or additional details of the payment.
- Click Save.
- The credit note will be closed after saving.
To cancel a supplier credits:
- Check the row of the supplier credits, click Bulk Action button and click Cancel.