Entering Credit Notes in Microsoft Dynamics GP

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BDO

Credit notes are transactions created in payables management for amounts receivable from the vendor. When you receive a credit memo, the preferred method is to apply it to the original invoice to which the vendor has indicated to apply the credit. Read on to find out how to manually apply credit notes in Microsoft Dynamics GP.

There are times when you are unsure to which invoice to apply the credit. For example, an overall vendor credit issued for customer appreciation. In this case, you would enter the credit and post it as “unapplied”. Later, you can go to Apply Payables Documents and apply the credit memo to a vendor invoice.

When the payment is made, the cheque stubs will print the details of the credit note against the invoice to which it was applied.

Credit Note Entry in Microsoft Dynamics GP

First, navigate to TransactionsPurchasingTransaction Entry.

Enter Credit Notes in regular Payables transaction batches, in the same manner as invoices. When entering Credit Memos, select “Credit note” from the Document type drop-down instead. Fill out the following required fields: Voucher Number, Vendor ID, Document Date, and Document Number.

Note: Set distribution as credit for purchase accounts, and debit for payables on the distribution window.

Manually Applying Payables to Credit Notes

After you enter a Credit Memo in Payables Transaction Entry, click the Apply button. It will automatically list all existing unpaid invoices. You will be able to select invoices to apply to the Credit Memo. You can also edit the amount you are applying against multiple invoices.

Scenario 1: Applying Credit Notes in the Payables Transaction Window

When applying, you can split the credit amount between any number of invoices. In the first screenshot below, the credit notes, the unapplied amount ($3,589.95), was allocated between four invoices. Two invoices were fully applied to the credit note and the remainder was partially allocated on the last two invoices.

Scenario 2: Posting Credit Notes and Invoices

In the Inquiry window below, there are 3 invoices and 2 credit memos.

Navigate to PurchasingTransactionsApply Payable Documents (Focus on Credit memo #7001.1 – $175.62).

Select the vendor ID, document type and document number.

The user can apply any portion of the credit note to the available invoices. In the screenshot below, $50 was applied to each of the two invoices. It shows $75.62 is the remaining unapplied credit note and the revised amount remaining on the invoices is $43.55.

When drilling back to the source credit note in the vendor inquiry screen, you can select the “apply” button to view the allocation of what was applied and the balance available.

In part two of this series, find out how to Auto Apply a Credit Note in Microsoft Dynamics GP.

 

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