Client Credits and Debits
Use credit and debit notes to ensure G.S.T. calculations are correct if using the Invoices or Hybrid accounting basis. They modify client debt and ensure the debtors record is accurate in cases where adjustments have been made to any invoices.
Each note must link to a billed invoice.
Credit or debit notes can be created for supplier invoices. They result in an adjustment to G.S.T. in the period they are created, not the date of the invoice(s) they relate to.
To create a new credit or debit note, or edit an existing one, select the correct invoice in the Debtor's Ledger grid in Client operations and click the Credits/Debits button.
The Credits/Debits form displays.
The form displays the invoice number of the invoices that was selected in the Debtors grid of the Operations Centre.
If adding a note the compulsory fields are the correct credit/debit button and amount. The default button is Credit. To enter a debit note check the Debit button.
The date must be later than the period of the last G.S.T. imputation run if using the Invoice or Hybrid accounting basis.
It is a good idea to include a description of the note - this prints on the various reports and helps to identify why the note was created. Your client may require the description to be included for tax purposes.
A note results in an adjustment to the G.S.T. on the selected invoice if you are using the Invoices or Hybrid accounting basis.
To print a credit/debit note to send to your client click the Print button at the bottom of the form.
If you are using the Payments basis the note adjusts the amount the client owes and does not change your adjustments for G.S.T. Credit and debit notes affect the aged debtors analysis, client statements and balances/work in progress.
Do not use credits and debits to enter write offs. Write offs clear a debt, not increase or decrease it. Write offs are also recorded as bad debts written off. And show as such on the balance sheet.