Session 5 - 04 Credit Notes

Summary

The speaker recounts a situation involving a credit note from a supplier that remained unused since 2014, amounting to a thousand dollars. They explain the concept of a credit note as a form of credit for future purchases, similar to online returns. The issue arose from an assumption that the supplier would be used again, which was not the case. The speaker advises on the importance of timely follow-up and communication with clients regarding such matters, and the ethical responsibility to attempt to resolve the situation, whether through refund or client consultation, to ensure a satisfactory outcome.

Takeaways

• 😀 A credit note is a document that represents an amount owed to a customer by a supplier, similar to a store credit for future purchases.
• 😅 A credit note was issued to the speaker's husband's business for a thousand dollars in 2014, but it remained unused for an extended period.
• 🤔 The business had an assumption that the supplier would be used again, which is a common practice but can lead to issues if not revisited.
• 🕒 The importance of regularly reviewing outstanding credit notes is highlighted, as they can become outdated or forgotten over time.
• 📞 The speaker suggests proactive communication with the client and supplier regarding the status and potential use of the credit note.
• 💡 If a supplier is unlikely to be used again, it's recommended to contact them to inquire about the possibility of a refund.
• 📝 The need for proper documentation and note-taking is emphasized to ensure a clear record of actions taken and decisions made.
• 🤝 Ethical obligations should be fulfilled by trying the best to resolve the situation, even if it involves difficult conversations with clients or suppliers.
• 🚫 There is a limit to what can be done if a client decides not to pursue a refund or use the credit note, as long as all efforts have been made.
• 💰 Credit notes represent potential cash for clients, and their management should be handled with care to avoid misunderstandings or losses.
• 🔍 The speaker emphasizes the importance of being attentive to details and assumptions in business transactions to avoid potential issues.

Q & A

What is the main issue discussed in the script?

The main issue is a credit note of a thousand dollars that has been sitting unused since 2014, related to a supplier that the husband's business no longer uses.

What is a credit note as explained in the script?

A credit note is a document issued by a supplier when a customer returns goods or when there is a failure in delivery, which can be used as a form of payment for future purchases.

Why was the credit note not used according to the script?

The credit note was not used because the business stopped using the supplier and there was an assumption that the supplier would be used again in the future.

What should have been done when it was noticed that the supplier was not being used anymore?

The business should have followed up with the supplier or the client to address the credit note, possibly requesting a refund or discussing how to proceed.

What is the potential problem with waiting too long to address a credit note?

Waiting too long can lead to the supplier no longer honoring the credit note, and the client may question why the issue was not addressed sooner.

What is the ethical obligation of the business in this situation?

The business has an ethical obligation to try and resolve the issue with the supplier, communicate with the client, and ensure that all actions are taken to reach a fair outcome.

What should the business do if the supplier refuses to provide a refund?

If the supplier refuses a refund, the business should inform the client of the situation and discuss alternative ways to proceed, such as leaving the credit note as is or finding another solution.

Why is it important to document the actions taken regarding the credit note?

Documenting actions ensures that there is a record of the business's efforts to resolve the issue, which can be referred to in the future if needed and helps to avoid misunderstandings.

How does the script relate the concept of a credit note to online shopping?

The script uses the example of buying a dress online and receiving a credit note if a return is made, which can be used for future purchases from the same company.

What is the potential outcome if the business does everything in its power to resolve the credit note issue?

If the business has made every effort to resolve the issue, it can consider itself ethically clear, even if the credit note remains unresolved, as long as the client is informed and understands the situation.

What does the script suggest about the importance of communication in business?

The script suggests that clear and timely communication with both suppliers and clients is crucial for managing expectations and resolving issues effectively.