What is this feature?

A credit note is a document a seller issues to a buyer to notify them that credit is being applied to their account. This can be done when the buyer has paid more than the actual amount to be paid. Instead of issuing a refund, you can issue a credit note to the buyer for the required amount. This solves the pain point of rectifying errors, disputes, and customer dissatisfaction in sales transactions by providing refunds and adjustments. Once created, these notes can be linked to invoices, allowing the cumulated credits to be tracked on a client level.

Why is it needed?

Credit notes are necessary in the following cases:

• If the supplier has inadvertently charged the buyer excessive amounts.
• If the quantity of a product the customer receives differs from the amount specified on the invoice.
• A credit note serves as a deduction against upcoming invoices, effectively reducing the invoice amount by the credited value.

How to create a credit note in Keka PSA

Creating a credit note can be done in these easy steps:

Go to Project (1) from the left navigation pane and select the Finance tab (2). Select Invoices tab (3) and in this tab, find the Credit Note (4) tab. Click on Raise Credit Note (5) to raise a credit note. 

Choose the client and link the credit note to an invoice on a specific line item. You can add a service or a product as a line item by selecting the drop-down. You can also add a Description, Quantity, and Amount for this.

Once you have entered the details, you can add a note to specify any particulars about the credit note. Once you are done, click on Save As Draft to save this in the system to be generated at a later date. You can also generate the credit note now by clicking on Generate Credit Note

                                                                                    Figure 2

How to Adjust Invoice Amount Against the Credit Note

Go to the Projects tab (1) from the left navigation pane, select the Finances tab (2) and then the Invoices tab (3), then choose Due Invoices (4). Here, find the invoice for which you want to mark received payments. Click on the three dots under the Actions column corresponding to that image and from the drop-down, select Receive Payments (5).

In the Receive Payment screen, select the Apply Credits to This Invoice checkbox. You can see the total amount of credit available. You can also enter the specific amount of credit to be applied to this particular invoice. Enter other relevant details such as the Payment Date, Payment Mode, Reference Number, and the Amount Received. 

Once you are done entering the details, click Add to finish applying the credit available based on a credit note that has been previously created, and mark the payment as received.