How to create credit notes?

Problem

When canceling an invoice (for whatever reason), a credit note needs to be created with a new sequential number using a Credit Notes numbering scheme.

Solution

Below is a suggested solution implemented by many of our customers.

It aims to show how to create Receivables with negative total, add a special numbering scheme for invoicing, and how to create a credit note itself.

Negative Receivable

Whenever an invoice is canceled, each canceled language in project needs to get a negative value. 

Note! Especially for invoices with many items, this is a time-consuming and error-prone process.

  1. Open the Project for which the Receivable should be created.
  2. Go to Finance -> Receivables and click Add Receivable in the language where it belongs.
  3. On the window that shows up, enter a negative Rate Value and (positive) Quantity, e.g. if the Credit Note needs to be for €200, enter -200.00 as Rate Value and 1 as Quantity.
    (You may add "Credit Note" in the Description field to make it visible on the document.)
  4. After creating the negative Receivable, you will see that the Total Agreed amount has changed in the task.


    • If the amount seems not correct, check the Minimum Charge amounts, select the Ignore option next to it (visible only if Minimum Charge is set).
  5. Credit note created as described above will be visible on Project Confirmation document you generate in relation to that order or on invoice document once it is created (see below).

Sequential number

A dedicated numbering scheme can be used for credit notes.

Actual credit note

If there is a need for specific document called "Credit Note" a custom-made invoice template can be prepared by the XTRF customization team. At the same time, the relevant tasks in the project(s) should be released automatically and thus become available for creating a new invoice.

Best practices

Consider two things in your current setting of invoicing procedures for situations when credit notes are issued:

  1. The numbering scheme may include a code like "CN-", so if searches start with this two letters they return credit notes, naturally.
  2. Use Categories for client invoice - adding "credit note" as a drop-down item could help you filter out all invoices labeled as "credit note". Make sure this category is selected every time a new credit note is added to the database.


You may also be interested in a follow-up topic: https://xtrf.userecho.com/knowledge-bases/6/articles/1257-how-to-deductoffset-credit-note-on-future-invoices

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