Creating a Credit Note from a Payable Invoice

Once a payable invoice has been posted, you can use it to begin to create a credit note. The document created by the conversion inherits many of the original invoice details, including its currency and its analysis dimensionsClosed Custom objects that allow you to analyze the activity in your business in additional ways, such as by cost center, project, employee, or any other business entity important to you..

To create a credit note from a "Complete" payable invoice:

  1. Locate and retrieve the details of the posted payable invoice that you want to convert. See Viewing Payable Invoice Lists for more information.
  2. On the payable invoice detail page, click Convert to Credit Note. If you can't see this button, contact your administrator.
  3. Enter the vendor credit note number provided by the vendor. The behavior of this field is controlled by custom settings. For more details, ask your administratorClosed One or more individuals in your organization who can configure and customize the application. Users assigned the System Administrator profile have administrator privileges..
  4. Click Convert to Credit Note. This creates a new credit note using the details of the selected payable invoice.
  5. Modify the "In Progress" payable credit note details, as required.
  6. [Optional] Specify a reason for issuing the credit note.
  7. [Optional] Add, edit or remove credit note line items, as required.
  8. Click Save.
Notes:
  • If you create a credit note from a payable invoice that has allocation rules assigned to the expense lines, you must manually create the expense line analysis items on the credit note.
  • If you create a credit note from a payable invoice with prepaid expense lines, you must cancel any journals in progress that relate to the payable invoice, and review any posted journals that relate to the period credited.

Converting an Intercompany Payable Invoice to a Credit Note

If the payable invoice has intercompany lines, when you convert it to a credit note the credit note line items inherit the destination company from the payable invoice line items. This ensures that the credit note has corresponding intercompany lines.

When you post the payable credit note, an intercompany transferClosed Object used as a staging location for data used when transferring costs to other companies in the same organization. record is created. When you process this intercompany transfer, a journal is created in the destination companyClosed Company that receives the costs during an intercompany transaction.. See Using Intercompany Accounts Payable for details of how GLA and dimension values are derived.

Matching a Credit Note to Its Associated Payable Invoice

When you create a credit note by clicking the Convert to Credit Note button, you must match the credit note to its associated payable invoice. You can do this in two different ways:

  • Using the Match button: enables you to match the payable credit note to its associated invoice.

    Note: The Match button is only available for Lightning Experience.
  • Using the Post & Match button: enables you to automatically post and match the credit note to its associated payable invoice

These buttons are only available if the Payable Invoice field is populated on the credit note, and the payable invoice is unmatched. Before clicking the Match button or the Post & Match button, you must set the document's company as your current company.

When you click any of these buttons:

  • If the payable invoice and credit note fully match each other, the invoice's Match Type will be set to "Credited" to indicate that it has been fully matched to a credit note.
  • If the credit note value is less than the payable invoice value, the invoice will be part matched. You must match the documents manually if you want to apply a discount or write-off.
  • If the credit note value is greater than the payable invoice value, an error message will be displayed and you will remain on the payable credit note detail page so that you can amend the credit note value. If the credit note value is intentionally greater than the invoice value, you must match the documents manually.

When the payable invoice and credit note match successfully, a matching reference is created and the Matched Payments list on each document is updated in the usual way. Any currency differences are handled automatically by the creation of currency write-off journals. Documents matched using the Match button or the Post & Match button can be unmatched in the usual way.

Using Match

Note: This is only available for Lightning Experience.

To match a payable credit note to its associated payable invoice:

  1. Click the Payable Credit Notes tab.
  2. Locate and retrieve the details of the payable credit note that you want to match. See Viewing Payable Credit Note Lists for more information.
  3. Set the document's company as your current company.
  4. On the payable credit note's detail page, click Match. The Match Payable Credit Note window displays.
  5. Click Match.
Note:
  • You can only match a credit note to its associated invoice if both documents have been already posted and remain unpaid an unmatched.
  • If the credit note fails to match, you will remain on the payable credit note detail page so that you can correct the credit note details.

Using Post & Match

To automatically post and match the credit note to its associated payable invoice:

  1. Click the Payable Credit Notes tab.
  2. Locate and retrieve the details of the payable credit note that you want to post and match. See Viewing Payable Credit Note Lists for more information.
  3. Set the document's company as your current company.
  4. On the payable credit note's detail page, click Post & Match. If you are using Lightning, the Post and Match Payable Credit Note window displays and you must confirm the action.
Note:

If the credit note fails either to post or to match, it will be neither posted nor matched regardless of whether the failure occurred during the posting or the matching process. You will remain on the payable credit note detail page so that you can correct the credit note details.

Converting a Payable Invoice That Contains Withholding Tax Information to a Payable Credit Note

A payable credit note converted from a payable invoice will inherit the Withholding Tax information.