Credit notes function as negative invoices. However, it is not as simple as creating a purchase credit note to offset a purchase invoice on the same order. As DEAR does not automatically link the positive and negative invoices together, both documents must be closed out for the financials to add up correctly. This is done using the Supplier Deposits function. This is most commonly used when a credit note has been applied as part payment in Xero and QBO, needing to be closed out manually in DEAR.
For more information on sale invoices, see Applying Credit Notes as Part Payment - Sales.
- Set up an account for Supplier Deposits (necessary).
- Familiarity with Processing a Purchase (necessary).
- Familiarity with Credit Notes (necessary).
- Users will need the Purchase Task – Invoice & Credit Note authorisation permission.
To close the purchase invoice:
- Navigate to Purchase → Purchases and select the purchase order that needs to be closed.
- In this example, a credit note of $375 has been applied to an order of $2750. You can see that both the credit note tabs and invoice tabs have a balance due – this is what needs to be closed out.
- In the Credit Note tab, choose +Supplier Deposit. A pop-up window will appear with the credit note amount pre-filled. Click Create to continue.
- The refund will be paid into the Supplier Deposit account, closing out the credit note balance. Save before moving to the next step.
- Next, the invoice needs to be closed. Go to the Invoice tab, click +Use Supplier Deposit and select the supplier deposit we just added.
- You will see that the credit note has now been discounted from the invoice total, leaving a nil balance in the Supplier Deposit account. The remainder of the invoice can be paid as usual to completely close out the order.