An invoice credit records goods a customer sends back, or a credit you give a customer against an invoice. It is the mirror image of an invoice: where an invoice books the sale, records what the customer owes, and issues the stock, an invoice credit backs those out again. It reverses the revenue and the tax, reduces what the customer owes you, and for stock-tracked items takes the goods back into inventory. A salesperson, the accountant, or the owner usually raises one when goods come back or a customer is credited.
An invoice credit posts to your accounts the moment you save it, the same as the invoice it reverses. You can raise it against the invoice the goods went out on, which pulls that invoice's lines onto the credit so you only credit what you actually billed, or you can enter the lines by hand for a credit that has no single invoice behind it.
ZyncLedger has credits, not debit notes
A customer return or allowance is recorded as an invoice credit. ZyncLedger has no separate customer debit note on the sales side; the invoice credit is the one document that reverses a sale.
Find invoice credits under Sales → Invoice Credits.
Before you start
- The customer you are crediting must exist in Customers. Picking the customer pulls in its billing and delivery addresses, its default sales rep, its pricing, and its default AR Account.
- An Accounts Receivable account must exist in your Chart of Accounts. The invoice credit credits this account, so it must be of type Accounts Receivable. The customer's default AR account prefills it.
- Each line credits a product. Stock-tracked products (of inventory type Inventory) take stock back in and reverse their cost; Service and Non-Inventory products credit with no stock movement. At least one product line is required to save.
- Every line needs a location (the warehouse the returned goods go back into). The header location, if you set one, prefills each line.
- To reverse tax on a line, a tax payable account must be configured under Tax settings, since the tax reverses there.
- You need the Create Invoice Credits permission, granted per user under Permissions. List Invoice Credits lets you open the screen, and Edit, Delete, View, Print Invoice Credits, and Copy to Invoice Credit cover the rest. See Users, seats & permissions.
Raise an invoice credit
Open a new invoice credit
Go to Sales → Invoice Credits and select New Invoice Credit. The invoice credit form opens full screen.
To tie the credit to a specific invoice instead, start from the invoice list (see Credit against an invoice below), which pre-fills the customer and the billed lines for you.
Check the template
The Template picker sits in the toolbar at the top of the form. ZyncLedger pre-selects your default invoice credit template, so you can usually leave it. The template decides which fields the form shows and how the printed credit looks; switch it here if you keep more than one layout. See Print templates for how these are set up.
Choose the customer
Select the Customer (required). ZyncLedger fills the Billing Address and Delivery Address from the customer's record, sets the Sales Rep to the customer's default, sets the AR Account to the customer's default, and prices the lines you add from the customer's pricing (any wholesale price or default discount). The customer's current Balance shows below the field for reference.
Confirm the AR account
Check the AR Account (required). This is the Accounts Receivable account the invoice credit credits, that is, the account that carries what the customer owes you. It prefills from the customer, and the list only offers accounts of type Accounts Receivable.
Set the credit note date
Enter the Credit Note Date (required). This is the date the credit posts to the ledger, so it decides which period the reversal and the stock return fall in.
Set the transaction number
The Credit Note Number identifies the invoice credit. How you fill it depends on the number mode for invoice credits:
- Automatic (the default): the field shows Auto-generated and ZyncLedger assigns the next number when you save. Leave it alone.
- Manual: you type the number yourself. It is required and must be unique across all transactions.
See Document numbering to change the mode or set up a multi-series numbering scheme.
Add dimensions and addresses (optional)
Fill any of these that help:
Field What it does Location The warehouse the returned goods go back into. It prefills the location on each line, which you can still change per line. Each line must have a location before you can save. Branch The branch to attribute the credit to, for reporting. Sales Rep The rep the credit is attributed to. Prefilled from the customer's default. Billing Address / Delivery Address Prefilled from the customer; edit either for this credit if needed. Add the credit lines
If you started from an invoice, the lines are already filled in from that invoice. Otherwise fill a row in the items table for each item you are crediting:
Column What it does Product (required) The item being returned or credited. Selecting it fills the description, price, and any tax and discount defaults, and sets the quantity to 1. Description The line text, prefilled from the product. Edit it for this credit if needed. Location (required) The warehouse this line's goods go back into. Defaults from the header location. Quantity (required) How many units you are crediting. When the line comes from an invoice, this cannot exceed the quantity still uncredited on that invoiced line. Price (required) The unit selling price being credited. Prefilled from the customer's price for the product; use the lookup beside the field to pull a recent price. Discount % / Discount Amount A line discount, entered either way. Tax % / Tax Amount A tax to reverse on the line, entered either way. Tax Inclusive Whether the price already includes the tax (Inclusive) or the tax is added on top (Exclusive). Total The line value, calculated for you. When a line is linked to an invoice, three read-only columns show what is left to credit: Original Invoice Qty, Already Credited, and Available. ZyncLedger caps the Quantity at Available so you cannot credit more than remains.
A blank row waits at the bottom of the table, so a new line appears as you start filling the last one. To remove a line, select the trash icon at the end of its row. The Summary on the right totals the Total Items, Total Qty, Sub Total, Total Discount, Total Amount, Total Tax, and Final Amount as you type.
Add a credit reason (optional)
Use Credit Reason to record why the goods came back or the credit was raised, and the footer Description for an internal note. If you keep standard wording, pick it from the note selector to autofill.
Save
Select Save to save the credit, Save & New to save and start another, Save & Close to save and return to the list, or Save & Print to save and print this one. Use Print to print without saving and Reset to clear the form. The invoice credit saves with a status of Open and posts immediately.
Credit against an invoice
Crediting goods a customer returns is safest done from the invoice, so the credit only covers what you actually billed. On the invoice list, tick the invoice or invoices you are crediting (select more than one only if they are for the same customer), then select Create Invoice Credit.
The invoice credit form opens pre-filled with the customer and each still-uncredited billed line, showing its Original Invoice Qty, Already Credited, and Available quantity. Adjust the quantities down to what is actually being credited, then save.
You do not have to credit an invoice in one go. Credit part now and the rest on a later invoice credit. ZyncLedger tracks how much of each billed line has already been credited and will not let a line's credited quantity exceed the quantity you invoiced.
Free-form credits are allowed too
A line you add by hand, without pulling it from an invoice, carries no cap. Use a free-form credit for an allowance or an adjustment that does not trace back to one invoiced line. Only lines linked to an invoice are capped at their remaining quantity.
What it posts
An invoice credit reverses an invoice, so it posts the mirror image. It credits (reduces) the Accounts Receivable account in the header by the credit's final amount, lowering what the customer owes you. Against that, it debits:
- Each line's sales account for its value before tax (the line total minus its tax), backing the revenue out of your Profit & Loss.
- Any tax on a line back to your tax payable account, reversing the output tax.
The credit to Accounts Receivable always equals the debited sales lines and their tax, so the entry balances. It flows through to the Trial Balance, the General Ledger, the Profit & Loss (the reversed revenue), and the Balance Sheet (the receivable).
For a stock-tracked product the invoice credit also takes the goods back into stock: on-hand quantity rises at each line's location by the returned quantity, received at the product's current average cost. ZyncLedger posts the cost back with it (debit Inventory, credit Cost of Goods Sold) at that cost, reversing the cost the sale booked. Service and Non-Inventory products credit with no stock movement and no cost posting.
Returned stock comes back at today's average cost
An invoice credit receives the goods at the product's current average cost, not the exact cost the original invoice issued them at. If your average cost has moved since the sale, the cost that comes back may differ slightly from the cost that went out.
Saving an invoice credit also reduces the customer's balance by the final amount, since they now owe you less overall. On each linked invoice line it records the credited quantity, which caps how much more you can credit against that line.
How an invoice credit settles an invoice
Raising the credit lowers the customer's overall balance, but on its own it does not mark any one invoice as settled. The credit sits as an open credit for the customer. To apply it to a particular invoice's outstanding balance, allocate it on a Customer Receipt, which can settle open invoices with the credit. That allocation is what moves the invoice toward Closed and settles the credit itself.
The invoice credit's own status tracks how much of the credit you have used up:
| Status | What it means |
|---|---|
| Open | The credit is posted and none of it has been applied yet. This is the status of every new invoice credit. |
| Partial | A Customer Receipt has applied part of the credit, but not all of it. |
| Closed | The credit has been fully applied. |
| Deleted | The credit has been deleted (see below). It is kept for the record but its amounts are zeroed. |
An invoice credit's status is about how much you have used it
The status above measures how much of the credit has been applied, not whether the goods came back. An invoice credit posts its stock and ledger effect in full the moment you save it, so it starts Open and moves to Partial or Closed only as you apply it on a Customer Receipt.
Tips & gotchas
You can only credit what you billed
When a line comes from an invoice, its quantity cannot exceed the quantity still uncredited on that invoiced line. ZyncLedger caps each line at its Available quantity, so you cannot credit more than you billed.
An applied or reconciled credit is locked
Once a Customer Receipt has applied part of an invoice credit, ZyncLedger will not let you delete it, reduce the total below what has been applied, or change the customer or AR account. Reverse the receipt first. A line that has been reconciled on a bank reconciliation, or a date in a period closed by the Ledger close date, also blocks changes.
Deleting an invoice credit removes its postings
There is no reversing entry. Deleting an invoice credit sets its status to Deleted, removes its lines from the ledger, takes the returned stock back out of inventory and reverses its cost, raises the customer's balance again, and rolls back the credited quantity on the linked invoice lines. ZyncLedger blocks the deletion if any receipt has been applied to the credit, if any of its lines have been reconciled on a bank reconciliation, or if its date falls in a period closed by the Ledger close date, so settled and locked history stays intact.
Related
- Invoice is the sale an invoice credit reverses. Credit an invoice from the invoice list to pull its billed lines onto the credit.
- Customers are the parties you credit, and carry the addresses, default sales rep, pricing, and default AR account the credit uses.
- Products & Items are the lines you credit; their inventory type decides whether a line takes stock back in and reverses a cost or credits with no stock movement.
- Warehouses & Locations are where the returned goods go back into.
- Chart of Accounts holds the Accounts Receivable, sales, cost of goods sold, inventory, and tax accounts an invoice credit posts to.
- Customer Receipt applies an open invoice credit against the customer's open invoices and collects the balance.
- GRN Credit and Bill Credit are the purchase-side credits, for goods and costs you send back to a supplier.
- Document numbering controls the invoice credit's transaction number.
