- What are credits?
- Creating a credit note
- Closing a credit note
- Tracking Inventory
- Other actions
What are credits?
Credits in Zoho Books represent the money that you owe your customer. A credit note is issued in the customer’s name in order to keep track of this debt until it’s paid off. The debt remains until it’s refunded or subtracted from the next invoice you send your customer.
To know how you as a customer can record the credit you receive from your vendors in Zoho Books, click here
Creating a credit note
To create a credit note in Zoho Books:
- Click the Sales tab and select Credit Notes from the dropdown.
- Click the + button adjacent to Credit Note or click the + New button on the top right corner.
- Enter the details of the credit note in the creation form.
- Click Save as Draft or Save as Open to create the credit note.
Or, you can create a credit note directly from an invoice in the name of the customer you want to issue those credits for. To do this,
- Log in to your Zoho Books account.
- Scroll down the Sales tab on the home panel to view Invoices.
- Filter to view the unpaid invoices in the name of the customer for whom you want to issue credits.
- Click on More - Create Credit Note.
Credit notes can also be created by selecting a customer from the Contacts tab. Select New transaction - Credit Note and proceed to create the credit note.
You can view and edit these anytime by scrolling down the Sales tab to view Credit Notes. Clicking on the pencil icon highlighted below lets you edit the credit recorded.
You will need to enter the following information while recording Credit Notes.
- Customer name - The customer you issue the credit for.
- Credit note # - Unique number assigned to each credit note. You can choose to auto generate your credit note number by clicking on the gear icon next to this box.
- Credit note date - The date on which the credit is being recorded.
- Item description - An item has to be selected if you have enabled inventory for your organisation.
Closing a credit note
By applying to invoice
Credits you issue a customer can be applied to an invoice raised for the same customer. Doing so will reduce the invoice amount accordingly. To do this,
- Open the credit note created and select the option Apply to invoice.
- A list of the invoices raised for that customer is displayed. Select the appropriate one and specify the amount to be applied.
- The invoice amount and the credit available are reduced accordingly.
- If all the credits are used up, the status of the note is changed to Closed.
This can also be done by opening the corresponding invoice and selecting Use credits. Or, simply click on the update on the invoice telling you there are credits available for that customer.
With a refund
If you’ve made a direct payment to your customer towards the amount owed to him, you can record this in Zoho Books against the corresponding credit note created. To do this,
- Open the credit note.
- Select More – Refund.
- Specify the refund date and amount refunded before saving it.
- The payment is recorded and the credit note is closed.
The payment recorded can be deleted by scrolling down till you see the Refund history. Click on the trash icon next to the recorded payment to delete the payment. The credit note status is changed to Open.
If you have enabled inventory for your organisation and raise a credit note towards items returned by your customer, your stock quantity will automatically be adjusted accordingly.
This is handy for scenarios where your customers return some items back to you and you need to account for this in Zoho Books. While recording the credit you offer your customer in place of the returned goods, simply specify the item quantity and this will automatically be adjusted in your Zoho Books items list.
Learn more about inventory here.
- Void - You can void a credit note on which no payment has been made yet, by opening it and selecting More - Void. The note will be rendered invalid. This action can be reverted by selecting the void note and clicking on More - Convert to Draft
- Delete - You can delete a credit note on which no payment has been made yet, by opening it and selecting More - Delete.
- Print - You can print a copy of the credit note by opening it and clicking on the print icon in the top left corner.
- PDF - Download a credit note in portable form by simply opening it and selecting the PDF icon in the top left corner.
- Email - You can email a credit note to your customer by clicking on the email icon in the top left corner.
Sort - Credit Notes can be filtered and viewed according to its status.
- Draft - The credit notes that you’ve saved as draft will be in the Draft status. Credit notes in the draft status will not have any impact on accounts.
- Open - The credit notes that you’ve saved/converted as open and are yet to be paid off to customers.
- Closed - The credit note has been accounted for, either through a refund or by associating it to an invoice.
- Void - The credit note has been made invalid.
Custom Views are specific filters to list your credit notes based on your criteria.
For example, out of all your credit notes in Zoho Books, you might want to view those credit notes that are greater than $1000.
With Custom Views, you can simply create this filter. All you have to do is set criteria and later use it to classify data.
You can find an example GIF image to understand how custom views work.
To create a Custom View:
- Go to the Credit Notes module.
- Under the All drop down, present at the top left, select + New Custom View.
- In the following page, give an appropriate Name to your view, define Criteria, Column Preference (i.e. columns which you want to see in the filtered results).
- Click Save.
Your new custom field will now be listed under Created By Me, in the dropdown.