Issue a credit note | Odoo Accounting

Summary

This video tutorial explains the concept of credit notes, their importance in business transactions, and how to handle them in OpenERP (ODU). It demonstrates creating a credit note for a returned or damaged product, guiding through the process of issuing a credit note directly from an existing invoice. The video covers the steps from accessing the accounting app, configuring the sales journal, creating and editing the credit note, to reconciling it with the original invoice. It emphasizes the ease of managing customer satisfaction and transparency in financial dealings.

Takeaways

• 📝 A credit note is a document used to inform customers that they have been credited for a reason, such as a product return or receiving a damaged product.
• 🔄 The journal entry for a credit note is the reverse of an invoice, with debits to income accounts and credits to accounts receivable.
• 💼 In Bloom's accounting system, credit notes can be configured to have a dedicated sequence separate from invoices, denoted by an 'R' prefix.
• 📊 The sales journal configuration in the accounting app allows for the setup of credit note sequences and other related settings.
• 📑 Credit notes can be created through the credit notes menu or directly from an invoice in the system.
• 🛒 If a product is returned or damaged, a credit note can be issued by selecting the credit note option on the invoice and entering the appropriate details.
• 📅 The reversal date on a credit note can be set to the current date or another specified date, depending on the situation.
• ➡️ There's an option to either reverse the transaction or reverse and create a new invoice, which affects how the credit is processed.
• 📝 After selecting to reverse, the credit note is created in draft status, where specific items can be adjusted before confirmation.
• 💸 If the customer hasn't paid, the credit note is automatically marked as paid by reconciling it with the original invoice, streamlining the process.
• 🔗 The system maintains transparency by linking the credit note to the original invoice and updating the customer portal accordingly.

Q & A

What is a credit note and why is it used?

A credit note is a document used to notify customers that they have been credited for some reason, such as returning a product or receiving a damaged product. It decreases the amount a customer owes.

How is the journal entry for a credit note different from an invoice?

The journal entry for a credit note is essentially the opposite of that of an invoice, with a debit to the income account and a credit to the account receivable.

Can you create a dedicated sequence for credit notes in the accounting app?

Yes, in the accounting app's configuration, you can create a dedicated credit note sequence that separates the sequences of invoices and credit notes, adding an 'R' to the beginning of the short code for credit notes.

How does the process of creating a credit note from an invoice differ from creating one directly from the credit notes menu?

Creating a credit note from an invoice automatically populates the same sales journal as the invoice, making the process more streamlined and ensuring consistency.

What is the purpose of the 'reverse' option when creating a credit note from an invoice?

The 'reverse' option allows you to create a partial credit note for the returned or damaged goods, without fully reversing the original invoice or creating a new one.

What does the 'reverse and create invoice' option do in the credit note creation process?

The 'reverse and create invoice' option fully reverses the original invoice and then creates a new invoice that can be adjusted to include only the undamaged goods.

How does the system handle a credit note when the customer hasn't made a payment yet?

If the customer hasn't paid, the credit note is automatically marked as paid by reconciling the amount directly with the original invoice, avoiding the need for a refund payment.

How can customers view their credit notes and invoices?

Customers can view their credit notes and invoices in the customer portal, where both documents are available for easy access and transparency.

What is the significance of marking the credit note as paid in the original invoice?

Marking the credit note as paid in the original invoice ensures transparency and helps in understanding that the amount for the returned or damaged goods has been accounted for, even if no actual money has been paid.

How does the system ensure that the customer is aware of the credit note issued to them?

The system includes a note in the 'chatter' section linking back to the credit note, ensuring that the customer is informed and can easily access the document.

What is the ultimate goal of handling credit notes efficiently as described in the script?

The ultimate goal is to keep customers satisfied by efficiently handling credit notes, ensuring they have a positive experience and are likely to return for more business.

Outlines

00:00

📝 Introduction to Credit Notes

The video script begins by defining a credit note as a document that informs customers they have been credited, typically due to a product return or damage. It explains that the journal entry for a credit note is the opposite of an invoice, with a debit to the income account and a credit to accounts receivable. The script then transitions to a demonstration within the OpenERP (ODU) dashboard, focusing on the sales journal configuration, where a dedicated sequence for credit notes can be created.

🛠️ Creating a Credit Note in ODU

The script continues with a step-by-step guide on creating a credit note in the OpenERP (ODU) system. It describes accessing the accounting app, navigating to an existing invoice, and using the credit note button to initiate the process. The script highlights the ability to input a reason for the credit, select a journal, set a reversal date, and choose between reversing the transaction or reversing and creating a new invoice. The process is illustrated with an example where a customer reports a damaged product and is offered a credit note.

🔄 Editing and Confirming the Credit Note

After initiating the credit note, the script explains how to edit the draft to include only the damaged product and then confirm the credit note. It emphasizes that since the customer had not yet paid, no refund is necessary, and the credit note is automatically marked as paid by reconciling it with the original invoice. The script also mentions the transparency provided by the system, allowing customers to see the credit note and its impact on their account through the customer portal.

🤝 Enhancing Customer Satisfaction with Credit Notes

The final part of the script discusses the importance of handling credit notes efficiently to maintain customer satisfaction. It suggests that by offering credit notes directly from invoices and making them easily accessible in the customer portal, businesses can ensure repeat business. The script concludes with a sign-off from the presenter, promising to see the audience in the next video.

Keywords

💡Credit Note

A credit note is a document issued by a seller to a buyer to acknowledge a reduction in the amount owed due to returns, damages, or other reasons. It is a crucial concept in the video as it explains the purpose and process of issuing a credit note to customers, particularly in the context of product returns or damages, as illustrated by the example of a damaged tomato plant.

💡Journal Entry

In accounting, a journal entry records financial transactions. The video mentions that the journal entry for a credit note is the opposite of an invoice, with a debit to the income account and a credit to accounts receivable. This concept is fundamental to understanding the accounting implications of issuing a credit note.

💡Invoice

An invoice is a bill of sale that itemizes the products or services provided by a seller to a customer. The video script discusses how a credit note is related to an invoice, especially when a product is returned or damaged, and how the credit note process can be initiated from an existing invoice.

💡Sequence

In the context of the video, a sequence refers to a series of numbers assigned to documents like invoices and credit notes for identification purposes. The script mentions the option to create a dedicated credit note sequence to differentiate it from invoice sequences, such as adding an 'R' to the beginning of the short code for credit notes.

💡Configuration

Configuration in the video refers to the setup or arrangement of settings within an accounting application, specifically the sales journal settings that determine how credit notes and invoices are managed and sequenced.

💡Reversal Date

The reversal date is the date on which the credit note is issued to reverse the original transaction. The video explains that this date can be set when creating a credit note and is important for the accounting records and the customer's understanding of when the credit was applied.

💡Draft State

A draft state in the video refers to the preliminary stage of a document, such as a credit note, before it is finalized and issued. The script describes how a credit note is created in draft status, allowing for edits before confirmation.

💡Confirmation

Confirmation in the context of the video is the act of finalizing a credit note. The script explains that once the credit note is confirmed, it is marked as paid, and the original invoice is adjusted accordingly.

💡Reconciliation

Reconciliation in the video refers to the process of balancing the accounts, ensuring that the credit note amount is correctly offset against the original invoice. The script illustrates how the credit note is marked as paid by reconciling it with the original invoice.

💡Customer Portal

A customer portal is an online interface that allows customers to access their account information, including invoices and credit notes. The video mentions that credit notes are available alongside invoices in the customer portal, enhancing transparency and customer satisfaction.

💡Transparency

Transparency in the video refers to the clear communication and visibility of business transactions, such as credit notes and invoices, to the customer. The script emphasizes the importance of transparency in maintaining customer trust and satisfaction.

Highlights

A credit note is used to notify customers that they have been credited for some reason, commonly for product returns or damages.

The journal entry of a credit note is the opposite of an invoice, with a debit to the income account and a credit to accounts receivable.

In OpenERP (ODU), you can configure a dedicated credit note sequence to separate invoice and credit note numbers.

Creating a credit note through an invoice in ODU populates it with the same sales journal, simplifying the process.

A credit note can be issued for a specific reason, such as 'damaged goods', which is displayed on the document.

The reversal date on a credit note can be set to the current date or another specific date.

There are options to either reverse the original invoice or reverse and create a new invoice with adjustments.

After reversing, a credit note is created in draft status, allowing for editing of the credited items.

A partial credit note can be confirmed and marked as paid without issuing a refund if the customer hasn't paid the original invoice.

The original invoice can be reconciled with the credit note, marking it as partially paid.

Transparency is maintained as the credit note payment is linked back to the original invoice in the system.

Customers can view their credit notes alongside their invoices in the customer portal, enhancing satisfaction.

Handling credit notes directly from invoices streamlines the process and improves customer relations.

The video demonstrates the practical application of credit notes in ODU for managing customer refunds and returns.

The presenter, Dow, provides a step-by-step guide on issuing credit notes in ODU, ensuring clarity and ease of understanding.

The video concludes with the importance of keeping customers happy through efficient credit note management.

Transcripts

hello dear o doers and welcome to this

video on credit notes first of all what

is a credit note a credit note is used

to notify customers that they' have been

credited for some reason the most common

reason that we use them here at Bloom is

if they want to return a product or if

they received a damaged product so since

a credit node is decreasing the amount

that a customer owes the journal entry

of a credit node is essentially the

opposite of that of an invoice with the

debit and the income account and the

credit in the account receivable let's

take a look at it in ODU so here we are

on our ODU dashboard and the first thing

we'll do is open the accounting app and

we're going to look at the configuration

of our sales Journal here we have the

option to create a dedicated credit note

sequence if enabled this will separate

the sequences of invoices and credit

notes and add an R to be the beginning

of the short code that is set here for

the credit notes for example

rinv instead of

INB next we'll create a credit note and

while that is possible through the

credit notes menu item below

customers we're actually going to

instead go to one of our invoices

directly we can see on this invoice that

it has been posted but we have not yet

received any payment for it so is

currently unpaid now now let's say that

Acres Lawn Care has reached out to us to

say that one of their tomato plants was

unfortunately Dead on Arrival but they

don't need a replacement and because of

that and we really want to keep them as

a customer we're happy to offer them a

credit note to do that we can simply

click on the credit note

button and we now have a few options

first we'll enter a reason displayed on

the credit note so I'll just say here

damage

goods and next we have the option to

select a journal one of the benefits of

going through the invoice instead of

creating a credit note by itself is that

this is already populated with the same

sales Journal that this invoice is in

next we have our reversal date and I'll

just leave that as today and finally we

have the option to Simply reverse or to

reverse and create

invoice I'm going to select the

suggested option reverse and by clicking

reverse we will have a credit note in

the draft State and we can choose what

exactly we want to be credited the other

option reverse and create invoice would

fully reverse the original invoice and

then create a new invoice that we could

adjust to have only the undamaged goods

so with reverse and create invoice we

actually have three documents the

original invoice the full credit note

and the new invoice but with this option

to reverse we'll only need two documents

the original invoice and the partial

credit note for the single damaged

plant so here we have our editable

credit note in the draft status we'll

remove all of the products except for

just one of the tomato

plant now we can confirm this credit

note

and since in this case the customer

hadn't already paid we don't need to

actually pay out a refund and this

credit note is automatically marked as

paid we can see through the info icon

here that it was paid by reconciling

this amount directly with the original

invoice which we can access either here

or through the

chatter back on the original

invoice we can see that it's been marked

as partially paid and we see another

info icon

here explaining that the amount of just

one tomato plant was paid by the credit

note so even though they haven't

actually paid us any money for this

invoice yet everything is transparent

and everything is easy to understand

lastly we do also have a note in the

chatter linking back to that credit note

so our customers are going to be

thrilled now that we can handle credit

notes directly from their invoices and

of course their credit notes are

available alongside their invoices in

the customer portal by keeping our

customers happy we'll be sure that they

keep coming back for more that's all for

this video from your pal Dow I'll see

you in the next one