Debit Notes (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 Purchase (Optional): To link the return directly to a specific transaction, click the search icon in the "Source Purchase" field. This opens the Select Purchase to Return modal where you can:
   • Search by GRN #, Bill #, or Supplier Name.
   • Filter by Branch and Date (e.g., "This Month", "Today").
   • Click Select on the correct transaction. This will automatically populate the return form with the exact items and quantities from that purchase, preventing you from returning more than was originally received.
4. Items: Add or adjust the items being returned (if you didn't use a Source Purchase, you will need to add them manually). 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.

Recording Refunds Post-Creation

If a user creates a debit note without a refund (either due to a lack of permission or simply choosing not to process the refund immediately), the refund can be processed later using the standard Banking modules:

For Debit Notes (receiving a refund from a supplier): Go to Banking > Deposits and create a deposit for the received money. You would associate it with the specific Supplier.

You can issue or process a refund for a saved debit note at any time after it is created, provided it is in a Posted status and has an outstanding refundable balance.

Users who have the appropriate refund permission can access the Record Refund feature in two places:

• From the List Page (index.php): Click on the action menu (the row clicking or three-dots menu depending on the table UI) next to the specific Debit Note. In the dropdown menu, click on Record Refund.
• From the Detailed View Page (view.php): Open the specific Debit Note to view its full details. In the top right corner of the document header, click the More dropdown button, and select Record Refund.

(Note: The Record Refund option will dynamically hide itself or show a lock icon if the user does not have the specific refund permission, or if the note has already been fully refunded.)

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.