How do I handling a Supplier Credit Note Used Against a Future Invoice

Scenario

We paid a supplier invoice in May, but subsequently received a full Credit Note for it. Before receiving the credit note, we received a new invoice from the same supplier for a separate transaction.

Because the new invoice is for a lower amount than the credit note, we still have a remaining credit balance with the supplier. No physical cash has changed hands for the second invoice. How do we record this in Clubtreasurer?

Solution

To accurately track this without duplicating bank transactions, you will use a Debtor Account (or a specific Supplier Credit account) to hold the balance.

Step 1: The Original Invoice

Record the original invoice as a standard Payment transaction.

• From: Bank Account

• To: Relevant Expense Cost Code

Step 2: The Credit Note

Because you have not received physical cash back yet, you must park this credit in a clearing account.

• Locate the original Payment transaction (from Step 1).

• Duplicate or mirror the transaction, but reverse the direction (enter it as a Receipt/Negative Payment). Alternatively, you can simply open the transaction and reverse it.

• Account: Set this to Debtors (or a dedicated "Supplier Credit" Debtor account).*

• Cost Code: Use the same Expense Cost Code from Step 1 to net out the original expense.

Step 3: The New (Lower) Invoice

Since no physical money is changing hands, you will pay this new invoice using your accumulated credit.

• Record a new Payment transaction.

• From: Debtors Account (this reduces your overall debtor/credit balance).

• To: The new transaction's Expense Cost Code.

Handling the Remaining Credit Balance

After Step 3, you will still have a leftover credit balance in your Debtors Account. You have two options for dealing with it moving forward:

• Option A: If the supplier refunds the remaining cash Record this as an Account Transfer from Debtors to your Bank Account.

  Note: Do not record this as a standard Receipt/Payment transaction, as the income/expense has already been accounted for.

• Option B: If you receive another invoice from the supplier Repeat Step 3. If the next invoice is larger than your remaining credit, split the payment into two transactions:

  1. One Payment from the Debtors account to fully exhaust the remaining credit.

  2. One Payment from the Bank account for the remaining cash balance due.

💡 Pro-Tip: If you frequently have rolling credits with this company, consider creating a specific Debtor Account named "Supplier Credit: [Supplier Name]". This keeps the transaction history clean and prevents it from getting muddled with your standard member or customer debtors.