Overview:

When the supplier has sent a refund following the entry of a credit note, it is crucial to record these transactions correctly to maintain accurate financial records. In this article, you will learn how to handle this scenario effectively. We’ll assume the credit note is for 120 (100 net amount + 20 tax). The process involves raising a purchase invoice on the supplier account for 120, using the same tax code as the credit note, and posting it to a suspense nominal code. Then, you’ll allocate the full value of both the invoice and the credit note. Finally, you’ll enter a bank receipt for the refund amount, ensuring the supplier account balance is zero and the refund is accurately reflected in the bank account.

Issue: The supplier has sent a refund

I have entered a credit note for a supplier and then the supplier has sent a refund.

Solution

For this example, we are going to assume the credit note is 120 (100 + 20 tax), then we would propose the following:

1. On the supplier, account raise a purchase invoice for 120 with the same tax code as the Credit Note and post it to the suspense nominal code (9998).
2. Go to Bank -> Allocate Pending Payment and Credit Notes to Invoice, select the supplier and both the invoice and the credit note will appear. Enter the full value against each line item.
3. Go to Bank -> Receipt and enter a receipt for 120 with the same tax code as the Credit Note and post it to the suspense nominal code (9998).

Once you have done the above, the supplier account balance will be zero and the money will show coming into the bank account.

Learn more about Cash Management in Zumzum Financials by reading our articles here.