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Credit notes on Xero

  • Fellow PM.Dip
  • Practice Licence
  • 1 post
  • # 119812

Hi, I am trying to get a basic bit of functionality changed in Xero - the way it handles purchase credit notes.  You can only allocate a credit note to an invoice, you cannot select it in the Reconciliation Match screen, and you cannot select it when doing a payment run without allocating it to an invoice first.  This means that the credit note does not show on the remittance advice to the supplier and the supplier must guess which invoice you have allocated it against.  In the real world it is possible to have paid the invoice and then receive a credit note later, meaning that you must allocate the credit against a random invoice.  The same is true of Sales invoices/credit notes. 

In addition, I have a client who receives one daily payment from the EPOS terminal that covers several sales to different customers.  When it includes a credit refund as well, it is not possible to select the credit in the Match process.  There are work-arounds but they are cumbersome.

This problem must affect most of us who use Xero.  I'd be interested to hear your views and, if you have reported it, what response you have had from Xero.

  • Member PM.Dip
  • 36 posts
  • # 119813

It is really frustrating not being able to select credit notes in the bank rec screen and as you say, sometimes you don't want to allocate it against an open invoice. Sometimes I'll mark the credit as refunded then match that along with the invoices, but that's not ideal either. Would be so much easier if they showed up in Match options. 

  • Member
  • Practice Licence
  • 13 posts
  • # 119815

That part of the system does not work correctly.

You can as suggested mark the credit note as refunded, then in the bank reconciliation "Find & Match" tab allocate all the invoices and the credit note to the payment.

However when you look back at the transaction via the suppliers account you first get a listing that excludes the credit note implying that you made a higher value payment. Only when you click on the Reconciled View Details do you see that a credit note was also used. The credit note is also excluded from the remittance advice.

In the bank reconciliation there should definitely be an option to select credit notes and also for these credit notes to be included in the remittance advice.

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