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How to record Credit Note from supplier?
hong
Member Posts: 11
Hi there,
I paid $3000 for a bill in March 2019.
The supplier gave me a credit note of $280 in April 2019 after realizing that she overbilled me $280 for March 2019.
My original bill in April was $2000. So I paid them $$1720 for Apr 2019 after deducting the credit.
How do I record the above so that the COGS show up correctly under P&L statements without messing up the balance sheet, expense transactions and etc?
ie. March 2019 will be $2720 COGS and Apr will be $2000 COGS.
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@hong You can add a credit to a bill by recording the total cost of the bill item and then adding a negative line item for an item called 'Credit'. For April, you can create a bill for $2000 and then add a credit for $-280. This way, the price of your line items stay the same!
@ckeen_1244 , if I do this, the COGS for April will be show up as $2000-$280=$1720 in the P&L statement for April.
However, the actual COGS for April is $2000 as the $280 credit is for March.
@Hong without a formal credit note feature, you may be better served by creating an Asset account for the credits that you have. Once you marked the bill as overpaid, then you can create a journal entry moving the funds that are used as a credit to the Asset account. This would likely mean debiting the asset account and crediting the income account. When you use the credit in the future, you can add a partial payment from the asset account and the remaining would come from the account in which you make the remainder of the payment from. Curious to hear if this workflow would suit your needs!
This is a ridiculous work around. Why can't we have normal accounting procedures in this program? It has the potential to be a good program; however, it is far too cludgey and needs to be upgraded by someone who actually does bookkeeping/accounting. I am wasting too much time trying to deal with this program and my experiment with it results in returning to other standard accounting programs.
The other problem with the above work-around is that a vendor name can't be attached to a journal entry.