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Sales Invoices and Credit Notes

A sales invoice records what a customer owes; posting it raises the receivable, the revenue and the output tax in one journal. A credit note reverses part or all of a posted invoice, and it must now say why the credit was given, because that reason is printed on it.

Where to find it

Admin Panel → Receivables:

  • Receivables — the To invoice and Invoices & credits tabs, where invoices and credit notes are raised and posted; the badge counts those raised and not yet posted

Architect Panel → ERP - Sales:

  • Sales Invoices — every invoice; the badge counts invoices not yet posted
  • Sales Credit Notes — every credit note, and the record screen where a credit note's return location is set

Who does it

Invoices and credit notes are created, approved and posted by holders of ERP: Receivables. The sales team can read them but not raise them, so the Sales console shows invoicing as "not offered" and the work appears on the Receivables console instead. Posting needs post access to the company.

Raising an invoice

  1. Open Receivables → To invoice. It lists shipped deliveries and orders for services with quantity not yet invoiced, and the net value to invoice.
  2. Press Invoice on the row. A draft invoice is created for everything still to invoice on that delivery or order, at the order's prices.
  3. Open the draft to check it, then press Approve, then Post to the ledger, or Approve and post in one step. Before posting you are told if the invoice is dated before the last invoice the company issued.

An order line can only be invoiced once, whether through its delivery or straight from the order. An approved invoice can be sent back with Return for amendment (reason required) or cancelled; cancelling hands its quantities back to the delivery or order.

What posting does

  • Ledger: debits the trade debtors control account with the gross total, credits sales with each line's net and output tax with the tax, using the posting rules for sales invoices. A line's own account wins, then its item's, then the customer's Default Revenue Account.
  • Due date: the invoice date plus the customer's Payment Terms (days). Ageing and reminders run from it.
  • Pricing and commission: the discount rules used on the lines are counted against their budgets, and commission is accrued to the salesperson.
  • The order moves to Invoiced when everything on it has been invoiced.

The invoice moves to Paid by itself when receipts or credits settle it in full, and back to Posted if an allocation is removed. A posted invoice is never edited: correct it with a credit note.

Raising a credit note

  1. Open a Posted or Paid invoice and press Create sales credit note.
  2. Enter how much of each line to credit. A line left at 0 is not credited.
  3. Fill in Reason for the credit, for example "2 units returned faulty" or "price agreed after dispute". It is required and printed on the credit note.
  4. If goods are coming back, open the draft credit note from Architect Panel → ERP - Sales → Sales Credit Notes and set its Despatch Location (shown on the console as Returns to). Leave it empty for a price-only credit.
  5. Approve and post it as you would an invoice.

Posting reverses the invoice's journal for the credited amounts, applies the credit to the invoice it came from, reverses the commission accrued on those lines, and, when a location is set, brings the goods back into stock at cost. A lot- or serial-tracked item is matched to the lot that was delivered to that customer.

What goes wrong

  • A credit note will not post with "Say why the credit is being given": the reason is empty. Credit notes raised before the reason field existed need one added before they post.
  • "say which location the returned ... goes back into": a line has no location and the header has none either. Set the Despatch Location, or remove it for a price-only credit.
  • Nothing appears on To invoice: the delivery has not shipped yet, or it has been invoiced in full.
  • Post is not offered: you have write but not post access to the company.

Worked example

A delivery of 60 units ships on Monday. On Tuesday the receivables clerk opens To invoice, presses Invoice on the delivery, checks the draft and presses Approve and post. The invoice falls due in 30 days. A week later the customer returns 2 faulty units. The clerk opens the invoice, presses Create sales credit note, credits 2 units with the reason "2 units returned faulty", sets the credit note's Despatch Location to the returns bay, and posts it. The invoice's balance drops by the credited amount and the 2 units are back in stock.

Recommendations

  • Invoice from To invoice rather than from orders, so nothing shipped is missed.
  • Write reasons for the customer: they are printed, not just filed.
  • Decide returns at the credit: set a location only when the goods physically come back.
  • Keep invoice dates in order; heed the warning before posting a back-dated invoice.