Debit Notes (Purchase Returns)

Manage returns to suppliers and record credits received.

Interface Overview

Business Overview

A Debit Note is used when you return goods to a supplier or when they agree to reduce a bill amount after it has been posted. This reduces the amount you owe the supplier.

Actions

Creating a Debit Note

1. Go to Purchases > Debit Notes.
2. Click Add Debit Note.
3. Source Bill: (Optional) Select the original Bill this return relates to.
4. Items: Add the items being returned. The system will suggest the original purchase costs.
5. Restock Checkbox: ⚠️ CRITICAL FOR INVENTORY
   • CHECKED (Default): Items are removed from inventory stock (reversing the original purchase). Inventory account is credited (decreases inventory value). Purchase Returns account is debited. Use this for normal supplier returns where items are being sent back.
   • UNCHECKED: Items are NOT removed from inventory. No inventory accounting entries created. Only Purchase Returns and Accounts Payable accounts affected. Use this for write-offs or when items should remain in stock.
6. Refund Option: Toggle "Record as Cash Refund" if the supplier has already paid the money back.
7. Click Save & Post.
8. Effect: This reduces your Accounts Payable balance and (if Restock is checked) decreases your Inventory.

Viewing & Searching

• Track all returns in the Debit Notes List.
• Filter by supplier to see total credit received.

Updating & Editing

Editing Debit Notes

• Draft Status: You can edit all fields including items, quantities, and the Restock checkbox when the debit note is in draft status.
• Posted Status: Once posted, debit notes become locked to maintain accounting integrity. You cannot edit a posted debit note directly.

Correcting Restock on Posted Debit Notes

If you need to change the Restock setting on a posted debit note:

1. Void the posted debit note - This reverses all accounting transactions and stock movements
2. Create a new debit note with the same details
3. Adjust the Restock checkbox as needed for each item line
4. Post the new debit note

This ensures a clean audit trail and maintains the integrity of your financial records.

[!NOTE] Draft Status: If the debit note is still in Draft status, you can simply click the Edit button to directly modify the Restock checkbox without voiding and recreating. The void/recreate process is only required for posted debit notes.

Voiding a Debit Note

1. Open the Debit Note and click Void.
2. Effect: The inventory is increased back to its previous state (if Restock was checked), and the supplier debt is restored.

[!IMPORTANT] Locked Bills: If a Bill cannot be voided because it is too old or already paid, Debit Notes are the professional way to correct mistakes or record returns.