Credit Notes and Free Credits allow you to process customer refunds and returns efficiently. Whether you need to credit a customer for returned goods, damaged items, or pricing adjustments, these tools provide flexible options to manage your credit transactions. Credit Notes are linked to completed invoices and maintain full traceability to the original Sales Order, while Free Credits offer standalone flexibility for situations where the original invoice isn't available or when consolidating multiple returns into a single transaction.
Two types of credit transactions can be created for customers:
Credit Note: A credit generated from a completed Invoice that will be linked to the original Sales Order.
Free Credit: A standalone credit that does not link to a Sales Order or Invoice.
Prerequisites for creating and managing Credit Notes
To create a Credit Note, you first need to ensure you have the following already set up:
The customers who are being credited.
The products that are being credited.
The warehouses where the credited stock will be returned.
Credit reasons, to allocate per product being credited.
Credit Note role permissions
Maintain control of your sales process by determining which users have the authority to create and manage Credit Notes by enabling the "Credit" role permission.
Tutorial Videos
How to process a Sales Order's credit
Methods for creating customer credits
Create Credit Notes
To create a Credit Note that will be linked to its original Sales Order, through the Sales Order's Invoice, where the Invoice is in the Completed status, you can follow one of the following processes:
Add Credit from the main menu.
Credit from the Sales Order's Invoice tab.
Credit from an Invoice.
Credit Invoice from the View Invoices page.
Credit Notes will be created in a Parked status, allowing you to edit and update the Credit Lines and details as necessary, before completing it.
When a Credit Note is created from an Invoice, only the products, quantities, and charges that are included in the Invoice can be added to the Credit Note. The Credit Price per product cannot exceed the invoiced price, and stock can only be returned on a Credit Note if the stock has been dispatched from the originating Sales Order.
Add Credit from the main menu
To create a Credit Note from the main menu:
From the main menu, go to Sales > Credits > Add Credit.
In the Sales Invoice Number field, search and select the Invoice being credited.
A Parked status Credit Note will be created, with an auto-generated Credit Number, with all products, quantities, and prices from the Invoice populated in its Credit Lines.
Credit from the Sales Order's Invoice tab.
To create a Credit Note from a Sales Order's Invoice tab:
Open the Sales Order and navigate to the Invoices tab.
Hover over the action cog for the completed Invoice.
Select Credit.
A Parked status Credit Note will be created, with an auto-generated Credit Number, with all products, quantities, and prices from the Invoice populated in its Credit Lines.
Credit from an Invoice.
To create a Credit Note for only selected lines of an Invoice:
Open the completed Invoice.
In the Invoice Lines tab, tick the checkbox for each product line that needs to be credited.
Hover over the action cog in the Invoice Lines' grid column header.
Select Credit.
A Parked status Credit Note will be created, with an auto-generated Credit Number, populated only with the selected products, quantities, and prices from the Invoice in its Credit Lines.
Credit Invoice from View Invoices
Creating a Credit Note from the View Invoices page will initially populate all products included on the invoice in the subsequent Credit Note.
To create a Credit Note for an Invoice from the View Invoices page:
From the main menu, go to Sales > Orders > View Invoices.
Locate the completed Invoice, and hover over the action cog icon in the Invoice's row.
Select Credit Invoice.
A Parked status Credit Note will be created, with an auto-generated Credit Number, with all products, quantities, and prices from the Invoice populated in its Credit Lines.
Multiple Credit Notes per Invoice
More than one Credit Note can be created for a completed Invoice, allowing you to flexibly manage your customers' refunds and returns accurately. If a Credit Note has already been created for an Invoice, when attempting to create a new Credit Note for the same Invoice, a pop-up window will appear to check if the new credit is a duplicate, or if another Credit Note is still required.
The Credit Note's confirmation pop-up window will display the following details in a grid:
Credit Note No.: Displays the Credit Number of the existing Credit Note. Click on the Credit Number to open the Credit Note.
Credit Date: The date the Credit Note was created.
Customer: Displays the existing credit's customer's name. Click on the customer to open their customer record.
Status: Displays the current status of the existing Credit Note.
Select the Create New button in the window to continue creating another Credit Note for the Invoice. A Parked status Credit Note will then be created, populated only with the invoiced product quantities that have not been included on the existing Credit Notes.
Free Credits
To create a Credit Note for a customer that is not generated from a specific Invoice, you can create a Free Credit. Free Credits are predominantly used if the refund or return's original Invoice isn't known, or to consolidate the credit of stock from multiple Invoices for a single customer, into one transaction.
Add a Free Credit
To create a Free Credit:
From the main menu, go to Sales > Credits > Add Credit.
In the top right corner, click on Free Entry.
Search and select the customer the Credit is for in the *Customer Code field.
A Parked status Free Credit will be created, with an auto-generated Credit Number.
Add Credit Lines in the Credit Lines tab fy filling in the following fields and selecting Add:
Product
Quantity
Price
Reason
Return
Comments
Manage a Free Credit
Just like a Credit Note, Free Credits allow you to update the Credit Date, Warehouse, and Doc Designer Template for the credit in the fields at the top of the Free Credit's page, whilst the Free Credit is in Parked status. You also have the option to provide a Reference for the Free Credit, should your customer have their reference for the return. Free Credits can then be deleted and completed in the same was as a Credit Note.
Manage Credits
After a Credit Note has been created, and whilst it is in Parked status, edits can be made to the credit to align with the customer's refund and return.
Credit Note details
At the top of the Credit Note, you will find the data fields that outline the main parameters of the credit, some of which are read-only. The table below describes the Credit Note detail fields displayed on each Credit Note.
Credit Note detail fields | Description |
Credit Number | Displays the Credit Note's unique transaction number. |
Customer Code (read-only) | Displays the code of the customer the credit is for. |
Customer Name (read-only) | Displays the name of the customer the credit is for. |
(read-only) | Displays the email address of the customer's primary contact. |
Customer Currency (read-only) | Displays the customer's currency code. |
Exchange Rate | If the customer's currency differs from your account's base currency, the currency rate set |
Reference Number (read-only) | Displays the Customer Reference from the Invoice's Sales Order. |
Credit Status (read-only) | Displays the current status of the Credit Note. |
Invoice Number (read-only) | Displays the Invoice Number of the Invoice the credit has been created from. |
Sales Invoice Date (read-only) | Displays the Invoice's Invoice Date. |
Required Delivery Date (read-only) | Displays the Required Date from the Invoice's Sales Order. |
Credit Date | Use the date selector to set a date for the Credit Note. |
Warehouse | Use the drop-down menu to select which warehouse any returning stock will be added. |
Template | Use the drop-down menu to select which Doc Designer Credit Note template will be used when the Credit Note is printed or emailed. |
Credit Lines
Below the Credit Note's detail fields, the Credit Lines tab displays a grid that lists all of the products, quantities, and prices that are due to be credited for the customer.
The table below outlines the grid columns in the Credit Lines tab. Edit the Credit Lines to align with any real-world adjustments needed for the credit until it is completed. You must either credit the price or stock.
Credit Lines grid column header | Description |
Action cog | Tick the checkbox on a Credit Line and hover over the action cog in the grid's header to select one of the following actions:
|
Line | Displays the product's credit line number. |
Product Code | Displays the code of the product being credited. |
Product Description | Displays the description of the product being credited. |
Units | Displays the product's base unit of measure. |
Qty | Displays the number of units that were invoiced. |
Price | Displays the price that was invoiced for the product, per unit. |
Returnable | Displays how many units of stock can be returned for the product, calculated as the quantity that has been dispatched on the Sales Order's shipments minus the quantity already returned on a preview credit for the Invoice. |
Credit Qty | Determines the number of units that will be credited for the product, which cannot be greater than the credit line's "Qty" number. Click on the Credit Qty field to edit. |
Credit Price | Determines the price that will be credited per unit of the Credit Qty, which cannot be greater than the "Price". Click on the Credit Price field to edit. |
Line Total | Displays the credit line's total credit value, calculated by the Credit Qty and Credit Price. |
Tax Rate | Displays the tax rate that will be applied to the credit line, populated from the Invoice. |
Reason | Click on the Reason field to select a reason for why the product has been credited. Go to Settings > System > Credit Reason to manage the reasons available. |
Return | Determines whether the credit will return the Credit Qty to your Stock On Hand (SOH):
|
Disassemble | If an Auto-Assembly for the product was completed from the credit's originating Sales Order, the Disassemble checkbox will be displayed. When the checkbox is ticked, a Disassembly for the Credit Qty will be completed, using the product's Bill of Materials, when the Credit note is completed. |
Line Comment | Click on the speech bubble icon to add any additional notes relevant to the credit line. |
Serial | If the product is serialized and Return is ticked, click on the Serial field to assign Serial Numbers to the returning stock. Only the Serial Numbers that were dispatched on the originating Sales Order will be available to assign. |
Batch | If the product is batch-tracked and Return is ticked, click on the Batch field to assign Serial Numbers to the returning stock. Only the Batch Numbers that were dispatched on the originating Sales Order will be available to assign. |
Delete | Click on the bin icon to remove the credit line from the Credit Note. |
📌 Note: Each Credit Line must include a Credit Price greater than 0.00 or return the Credit Qty.
When products from the originating Invoice aren't currently included on a Parked status Credit Note for it, you can add them as another credit line.
To add a Credit Line to a Credit Note:
Open the Credit Note.
Click on Add in the Credit Lines tab.
In the "Add to Credit" window, use the checkboxes available to select the remaining lines from the Invoice that need to be added on the Credit Note.
Click on Add.
Credit charges
By default, when a Credit Note is created from an Invoice and the Invoice includes charges, the charges will be included on the Credit Note; in the Charge grid that's displayed below the Credit Lines tab. The Credit Price
The Price on a Credit Note's charge cannot be edited, but the charge can be removed from the Credit Note by clicking on the bin icon in the charge's row. When a charge is removed, it will still be shown in the Charge grid, but highlighted in red, with a plus icon displayed. Click on the plus icon to add the invoiced charge to the Credit Note.
Bulk actions for Credit Lines
The options available in the bulk action cog in the Credit Lines tab allow you to quickly update the Return field for selected credit lines, or delete multiple lines at once. Making it quicker and easier to process credits with multiple lines.
Tick the checkbox of each Credit Line in a Credit Note's page, then hover over the action cog in the grid header to select one of the following action options:
Delete Selected Lines: Removes the selected lines from the Credit Note.
Check Return All Lines: Ticks the Return checkbox for the selected lines, so that their credit quantities are returned to your SOH.
Uncheck Return All Lines: Unticks the Return checkbox, so that not stock is returned, for the selected lines.
Print and Email Credits
Click on Print in the bottom right corner of the Credit Note or Free Credit's page to generate a PDF version of the credit, using the Credit Note Doc Designer template selected in the Credit's details.
Send the Credit Note or Free Credit to your customer by clicking on Email in the bottom right corner of the credit's page. By default, the customer's primary contact, "invoicing" contact, and default cc email address will populate in the "Email Credit Note" window, and the email's Subject and Body will populate from your account's email templates. You can make any necessary adjustments to the recipients, subject, and body of the email, as required. Click on Attach Files to include any documents that have been attached to the Credit, and tick the "Send me a copy" checkbox to include yourself as a recipient. Click Send in the Email Credit Note to deliver it to your recipients.
Attachments
Add external documents relevant to the Credit Note in the Attachments tab. You can either drag and drop files from your device into the upload tile in the Credit Note's Attachments tab, select "browse local files" to search and select the files to attach from your device, or select "browse uploaded files" to attach files already uploaded to your account's File Library.
📌Note: The upload file size limit is 20 MB. Supported file formats are: .png, .gif, .jpg, .jpeg, .bmp, .webp, .csv, .pdf, .doc, .xls, .xlsx, .docx, .msg, .dwg, .stp, .dxf, .ppt, .pptx., webp images are not supported in Doc Designer.
Delete a Credit Note
If a Credit Note or Free Credit is no longer needed and has not been completed, it can be deleted. To delete a Credit Note or Free Credit, click on Delete in the bottom right corner of its page. Once a Credit Note or Free Credit has been deleted, it cannot be edited, updated, or reactivated.
Complete a Credit Note
When all the lines, details, and charges on a Credit Note or Free Credit have been entered, or updated, and any returning stock has been received, update the credit to Completed status by clicking on Complete.
If the Return checkbox is ticked, the credit quantity advised for the product's credit line will be added to the product's SOH, in the warehouse selected. The stock will be added back to your inventory at the same value it was originally dispatched with.
Frequently asked questions
Can Credit Notes be created in bulk?
Can Credit Notes be created in bulk?
No, Credit Notes and Free Credits can only be created one at a time, directly in your account.
Can I conduct a partial credit note?
Can I conduct a partial credit note?
After creating the Credit Note from an Invoice, click on the bin icon along a credit line's row to remove the product from the Credit Note, and edit the Credit Quantity field to update the number of units due to be credited. Only the products, quantities, and prices included in the Credit Lines will then be credited when the Credit Note is completed.
Can a credit only include a charge?
Can a credit only include a charge?
If you are refunding only the charges on a Sales Order's Invoice, e.g. postage, freight or labor, create a Credit Note for the Invoice, delete all the Credit Lines, leaving only the on the credit, then complete the Credit Note.
Why has the credited stock not updated the Sales Order?
Why has the credited stock not updated the Sales Order?
Credit Notes are transactions that are completed independently to their originating Sales Orders and Invoices. When a Credit Note is completed, it will be logged in the Sales Order's and Invoice's respective Credits tabs, but the credit will not update or change the quantities in in the Sales Order's Order Lines or Invoice's Invoice Lines.