Applying payment to credit notes

Question asked by Alex Redmond 7 years ago

I have some credit notes on the basis of which I have paid a refund to the customer. I do not seem to be able to apply the payment to the credit notes, only to purchases. Am I missing something?

10 Replies

I see the problem.

How about deleting off the original payment, re-applying the correct part to the invoice then the balance to a bank a/c called 'overpayments' or something similar? You'd then be able to successfully apply the credit note to the invoice and would have a balance sitting on the overpayments a/c to either offset against a future invoice or refund at will.

Might not be much quicker than what you're doing right now though...

I'm not sure how other software handles it but in my opinion they're doing it right as it is.

A credit note and a refund aren't the same thing. A refund is as it says, a refund of cash. A credit note is a form of a receipt which can be offset against outstanding or future purchases. I wouldn't expect cash to change hands were a credit note issued.

If I returned a pair of jeans to a shop I wouldn't expect a credit note and a cash refund, either or.

That's in the world of cash. I invoice a customer for products. The customer pays my invoice. Some of the products are then returned so I issue a credit note. If the customer places a new order, they can offset the credit note against the invoice.

But if there is a credit balance on the account with no new orders pending, the customer may ask for a refund. In the world of Clear Books, it seems that I then need to raise an invoice to my customer to cancel the credit note and then pay my customer the refund as a separate transaction.

How can just processing a refund, without it being applied to a valid VAT invoice or credit note be correct? There is no 'source document' if you just pay a refund, what do you have to back-up the recovery of the VAT on the money repaid to the customer? Your original VAT invoice has not been amended, so you must have a VAT credit note to reduce the amount owed to you by the customer. If the customer has nothing to offset that against, then you have to be able to pay the credit note.

I think Kevin's suggestion is actually the ONLY workaround to this that can safely be used, the ClearBooks process is flawed.

I would be happy to be proved wrong however, please!

To the best of my knowledge, in Clear Books a credit note is only used to offset an amount against an invoice or bill.

If cash changes hands, it simply gets analysed as a refund.



Hi Alex,

Kevin is correct, there has to be a bill or an invoice to offset a credit note against. What's more, you can only apply a credit note to an unpaid bill or invoice and therefore a refund would be the opposite and would apply to cash payments as Kevin says.



So I can someone a credit note or give them a refund but not both. Is this something you plan to make available?

Hi Alex,

Yes, the refund goes through as a separate transaction. In Clear books refunds are used when a payment has been made and Credit Notes for when they have not.


But that assumes that you can only have one or the other. Surely there should be a way to pay off a credit balance on a customer account. Or get paid by a supplier for a debit balance.

The credit note can be applied to both an invoice due to be paid to you and a bill owed by you. So it all depends who owes whom and for what reason.

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