Debit Note
A debit note is issued to a supplier when you return goods, when they have overcharged you, or when the amount payable otherwise needs to come down. It reduces what you owe.
It is the mirror image of a credit note.
When to use one
- Returning goods to a supplier.
- The supplier has overcharged.
- Items arrived damaged or defective.
- Any post-purchase adjustment.
What it helps you do
- Record purchase returns.
- Adjust supplier bills.
- Correct overbilling errors.
- Reduce payable amounts.
Create a debit note
Purchases → Debit Note → + Add Debit Note
- Choose the Supplier and the Date.
- Set Source Purchase — the bill this debit note is raised against. This is what makes the note reduce the right payable, so fill it in whenever the return relates to a specific bill.
- Add the Line items being returned, with quantities and rates. Note that the STOCK figure reflects what you currently hold, so you can confirm the goods are actually there to return.
- Add a Note recording why.
- Check the Summary and click Submit, then approve it.
What it does to your books
- Reduces the payable to that supplier.
- Reverses the recorded cost.
- Removes the returned goods from stock.
- Records the VAT adjustment, which appears in the Purchase Return Register.