Sales returns and credit notes: price difference, wrong rate or warehouse
This page answers frequent questions about returns and credit notes for sales: how to credit a price difference without returning goods, why a return takes an unexpected rate or warehouse, and how a return changes the Sales Order and the outstanding amount.
For how to make a return, see Sales Return and Credit Note.
Credit a price difference without returning goods
From version 16, a return must have at least one item with a negative quantity. A credit note with quantity 0 gives "At least one item should be entered with negative quantity in return document".
To credit only a price difference:
- Open the original Sales Invoice and click Create → Return / Credit Note.
- Keep the rows for the items with the price difference, and delete the others.
- In each row, enter the quantity as a negative number (for example −10 for 10 units), and set Rate to the price difference per unit (for example ₹200). The rate cannot be more than the original rate.
- Keep Update Stock unticked, so no stock comes back.
- Untick Update Billed Amount in Sales Order, so the order is not shown as unbilled again.
- Save and submit.
The credit note reduces the invoice's outstanding amount by 10 × 200 = ₹2,000. No stock moves.
To increase the price instead, use Is Rate Adjustment Entry (Debit Note) on a new Sales Invoice against the original. It keeps the original quantity.
The return uses the wrong rate
- A return made from the original document (Create → Return / Credit Note, or Create → Sales Return on a Delivery Note) uses the original rate for the price and the original cost for the stock.
- A return made without an original document uses the rate on the return for the price. For the stock cost, see Why is the valuation rate wrong?.
So make returns from the original document whenever you can.
The return has the wrong warehouse
A return puts the stock back into the warehouse of the original row. To receive returns in a separate warehouse (for example to inspect them), set Default Warehouse for Sales Return on the Company. Returns then use that warehouse.
For serial number items, the serial number must be Delivered from that warehouse. If a return was cancelled and amended, check the serial number's status and warehouse before you try again.
The order shows unbilled again after a credit note
Update Billed Amount in Sales Order on the credit note decides this:
- Ticked: the Sales Order's billed amount goes down, and the items can be invoiced again.
- Unticked: the Sales Order does not change.
Untick it for price corrections and for goods you will not sell again. If the order will not be delivered again, Close the Sales Order.
The credit note's amount does not reduce the invoice outstanding
With Update Outstanding for Self ticked, the credit note keeps its own outstanding amount instead of reducing the original invoice. Allocate it to the invoice with Payment Reconciliation. Untick it if you want the credit note to reduce the invoice directly.
Returns in reports
A return is reported on its own posting date in most reports. In the Gross Profit report, a return made against an invoice is shown with the original invoice, so the month of the invoice changes, not the month of the return.