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Credit Note in Odoo V12

What is a Credit note?

A credit note is also known as a credit memo, which is short for “credit memorandum. A Credit Note is a document issued by a vendor to a customer when goods are returned to the vendor after a sale. Credit notes act as a Source document for the Sales return journal. This is a commercial document that the vendor produces for the customer to notify the customer that credit is being applied to the customer for various reasons.

The reason includes the following thing:

  • The customer returned the goods or rejected the services for any number of reasons
  • The goods were incomplete, damaged, or not as per specification usually during transit
  • There was a mistake in the price on the original invoice
  • The customer overpaid the original invoice

A Credit Memo is not to be substituted as a formal document. The Credit Memo rarely contains PO #, Date, Billing Address, Shipping Address, Terms of Payment, List of products with quantities and prices.

Example – Company-X sells goods worth 1,00,000 to Company-Y, however, 10,000 worth of goods were found damaged due to some reason & this is notified to Company-X at the time of actual delivery.

Company-X (seller) issues a credit note for 10,000 in the name of Company-Y (buyer). This reduces the receivables of the seller by 10,000 and the buyer is only required to pay 90,000.

Credit note in Odoo:

Odoo is a complete suite of open source business management applications designed to cover all your company’s processes, regardless of the sector to which it belongs: logistics, distribution, production, direct sales to customers, transport. Odoo Finance and Accounting in easy management of whole business functions as it comes integrated with CRM, Sales, Inventory and other ERP modules. Odoo invoicing is a business supporting module, which comes along with ample features like Customer Invoicing, Customer Credit Notes, Purchases, Adviser, Reporting, etc. A credit note issues in the name of customers in order to keep track of this debt until it’s paid off. In Odoo the debt remains until it’s payment registration is done. It is possible to create a credit note in Odoo for customer or supplier from an existing invoice also.

There are different ways to create Credit Note:

1. Creating from ‘Customer Invoice’

Go to Invoicing/Accounting and create a Customer Invoice

Select an ADD CREDIT NOTE option.

Choose the relevant checkbox for selecting the Refund Method and mention the reason for Credit Note. Select on Add Credit Note option.

You may find a credit note, added with the selected invoice. Open the Customer Credit Note which you have created recently. Click on the Validate option to confirm the Credit Note.

The form will show the Amount Due and Outstanding Debts.

2. Creating a new Credit Note From ‘Customer Credit Notes’

Go to Invoicing/Accounting and create Credit Notes

Now enter the Customer Details and Invoice Date. Select on Add an Item to add the products and click on Save option.

You can select the Validate button from the top left corner. The form shows outstanding payments for the selected customer. Also, you can see the options like Send & Print, Register Payment, Preview.

Now you can enter the payment details After payment is done. for that go to Register Payment > Credit note amount will display on the Payment Amount column. Also, choose a Payment Journal Option (either bank or cash). Click on Validate to confirm the payment.

Now the bill shows Amount Due as zero > Save

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