There is a bug in your credit note workflow. When I raise a credit note (as an invoice for a negative amount) I am prompted for a payment due date when this field does not exist in the form. If I attempt this procedure from another part of the supplier screen, I am forced to choose a bank account for a refund when I want the credit note to be unpaid on the supplier account.
Could you let me know when this will be fixed? The way that credit notes have been implemented on QF is very oddâŚ
This certainly shouldnât be happening. As you rightfully mention, this isnât required for a credit note. Weâll check this out on our end and then pass this to our development team.
Can I just clarify that you want the credit to sit on the supplier record as a prepayment, rather than an actual refund?
Itâs not a payment on account (which is a less confusing term than âprepaymentâ for us accountants). It is a negative invoice that should sit on the suppliers account and be netted off against future positive invoices. Not all credit notes are raised against specific purchase invoices. Sometimes a supplier just wants to give you a negative invoice for some reason.
For the purpose of QuickFile, it would be treated as a prepayment (which is just funds held on account). VAT would be calculated on this if youâre on cash accounting.
If itâs just a discount for future use, the better option may be to add a negative line to a future invoice.
I would assume that when they invoice you in the future it would show a discount of some sort to account for this adjustment, which you would just include as a separate line on the invoice.
This is incorrect from an accounting point of view. A credit note is not a payment on account/prepayment. It is a legal document that has an official accounting definition. It needs to be included in the VAT returns regardless of whether itâs accrual or cash accounting.
A credit note would not be included on a future invoice. It would appear as a negative line item in a statement of account.
A supplier has issued us with a credit note. How do I add it to their account? The credit note does not relate to any specific prior invoice. It will not be refunded in cash. It needs to appear correctly on our VAT return (accrual basis).
In QuickFile, the way to do this would be to record it as a credit on account. A negative invoice would achieve this. As standard, you can only post this as a refund to a bank account rather than a credit on account, but we can enable this on your account if you wish (itâs currently in testing).
This would:
Be accounted in the VAT return
Sit as a credit on the supplierâs account to be used against future invoices
Give you an entry as a credit note
Be accounted for on the nominal ledgers
If you would like me to enable this on your account, just let me know and we can get some account details from you to enable it.
Iâm very surprised that this has never been raised before. Credit notes are a standard transaction in every other general ledger Iâve seen in over 20 years of accounting!
Itâs been raised many times over the years (most often by @Lurch) but I guess the case of having a credit note as the first thing you receive from a new supplier with no prior purchases at all to offset it against is sufficiently rare that the workaround of âjust create the credit from a previous purchase, even if itâs not technically related to that specific purchaseâ is sufficient for most people.
Thatâs what Iâve been doing for years with one supplier who sends me a âretrospective rebateâ at the end of each month - essentially a âcashbackâ percentage of that monthâs spend. It doesnât technically pertain to one specific purchase but I handle it by crediting against any available paid-up purchase, so I can hold the credit on account against our first purchase the following month.
Weâve been using the supplier in this instance for many years. Itâs just that the credit is larger than any of their previous single invoices.
As I say, completely standard transaction in Sage, SAP, JDE, Xero, Quickbooks etc. I wonder whether anyone on the product team at QF is actually an accountant.
@jamespbmatt2 as @QFMathew mentioned, the ability to create a credit note without assignment to a previously issued invoice was a feature we implemented several months ago and is currently in develoment mode (meaning it must be manually activitated on your account). If you message one of us with your account details we can enable that for you.
Surprised Iâve never heard of this as I do mention it at least once a week and end up with all sorts of stuff I donât want on stock as I dread getting credit notes from suppliers for materials I donât needâŚ
Apologies for any confusion. What @Glenn refers to above is us just enabling specific test features on accounts. There isnât a development group as such, but we regularly open up test features to a small number of users before releasing them to the wider userbase.
I wouldnât describe myself as a random - Iâm the one who fixed depreciation for these guys! They used to think that it should be listed under Current Liabilities on the Balance Sheet . Iâve spotted quite a few other bloopers as well. Maybe there should be a bug bounty.