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Record Credit Notes for Sales Returns and Increase in Sale Value

When you sell goods, a customer may return goods for several reasons, such as damaged goods, the goods are not as expected by the customer, there being a shipping delay, the customer does not require the goods anymore, or even in cases where they ordered excess goods. A sales return changes your inventory and also affects profits. Hence, it is important to record the sales return. TallyPrime, allows you to record such sales returns using credit notes. However, you can record sales return before or after receiving the payment.

There are cases where you have to increase the price of the goods even after the sale is made. Such cases include an increase in transportation cost, or you are selling a good with a high fluctuating rate, and it is agreed to include such change in sale value at the time of the final sale. If the change in value is not done correctly, you can increase the sale value of the goods sold. TallyPrime, allows you to record such transactions through debit notes.

Sales Returns Transaction

When you accept sales returns, record such returns by issuing credit notes. The sales returns can be after or before receiving the payment and the accounting treatment for both such cases is different. However, TallyPrime allows you to record both scenarios of sales returns.

In this section

• Sales returns before receiving the payment
• Sales returns after receiving the payment

Sales returns before receiving the payment

If you are recording the sales returns before receiving the payment, you can select the reference as Agst Ref while linking the credit note to the sales invoice.

1. Open the credit note voucher screen and specify the buyer details.
   1. Press Alt+G (Go To) > Create Voucher > F10 (Other Vouchers) > type or select Credit Note.
      Alternatively, go to Gateway of Tally > Vouchers > F10 (Other Vouchers) > type or select Credit Note > press Enter.
   2. Press Ctrl+H (Change Mode) and select the invoice mode per your business needs.
   3. Party A/c Name: Select the party name.
   4. Party Details: Provide the Buyer details. You can also provide the Receipt or Order details per your invoice requirement and enter the Original Invoice No. and Date against which you have recorded the sales return.
      If you do not see the Party Details screen with options for Original Invoice No. and Date, then press F12 (Configure), and set Provide Receipt, Order, and Export/Import details to Yes.
2. Select the Sales ledger to allocate the stock items.
3. Provide the stock item details.
   
   • Select the stock item and enter the Quantity. The Rate gets auto-filled if you have sold the same item earlier. However, you can also enter the Rate or Amount manually.
     Create the item on the fly by pressing Alt+C.
4. Select the bill-wise details.
   1. Press F12 (Configure) > set Use default Bill-wise details for Bill Allocation to No.
      Henceforth, you can select the bill references in the Bill-wise Details screen until you change the option in F12 (Configure) of the invoice.
   2. Select Agst Ref, as you have not received the payment against the sales.
      
5. Provide Narration, if needed. As always, press Ctrl+A to save.
   

The credit note appears in the Credit Note Register.

Sales returns after receiving the payment

If you are recording the sales returns after receiving the amount, you can select the reference as New Ref while recording the credit note. When you provide the reference of the sales invoice, the credit note is linked to it. Hence, when you raise a sales invoice later, you can record it against this credit note.

1. Open the credit note voucher screen and specify the buyer details.
   1. Press Alt+G (Go To) > Create Voucher > F10 (Other Vouchers) > type or select Credit Note.
      Alternatively, go to Gateway of Tally > Vouchers > F10 (Other Vouchers) > type or select Credit Note > press Enter.
   2. Press Ctrl+H (Change Mode) and select the invoice mode per your business needs.
   3. Party A/c Name: Select the party name.
   4. Party Details: Provide the Buyer details. You can also provide the Receipt or Order details per your invoice requirements and enter the Original Invoice No. and Date against which you have recorded the sales return.
      If you do not see the Party Details screen with options for Original Invoice No. and Date, then press F12 (Configure), and set Provide Receipt, Order, and Export/Import details to Yes.
2. Select the Sales ledger to allocate the stock items.
3. Provide the stock item details.
   • Select the stock item and enter the Quantity.  The Rate gets auto-filled if you have sold the same item earlier. However, you can also enter the Rate or Amount manually.
     Create the item on the fly by pressing Alt+C.
4. Select the bill-wise details.
   1. Press F12 (Configure) > set Use default Bill-wise details for Bill Allocation to No.
      Henceforth, you can select the bill references in the Bill-wise Details screen until you change the option in F12 (Configure) of the invoice.
   2. Select New Ref, as you have received the payment against the sales.
      
5. Provide Narration, if needed. As always, press Ctrl+A to save.
   

You can settle this credit note by raising a sales invoice or payment voucher for the customer.

Credit Note Register

You can track the sales returns from your customers from the Credit Note Register. It displays a monthly break-up of credit notes. 

1. Press Alt+G (Go To) > type or select Credit Note Register.
   Alternatively, Gateway of Tally > Display More Reports > Account Books > Credit Note Register.
   
   
2. Select the required month and press Enter.
3. Press F8 (Columnar) and set the options as required to view the credit note columnar register.
   

The columnar Voucher Register of credit notes appears as shown below.

To change the voucher type, press F4 (Voucher Type) in the Voucher Register.

Click here to see the possible F12 configurations for Credit Note Register.

Account for Increase in Sale Value

When selling goods, there can be situations where you need to increase the sale value after the sales are made. Such situations arise when there is an increase in transportation costs or when you are selling goods with a high fluctuating rate and the change in rate is not correctly recorded in the final sale value. TallyPrime, allows you to record such transactions in a debit note by selecting the sales ledger in invoice mode.

1. Open the debit note voucher screen and specify the buyer details.
   1. Press Alt+G (Go To) > Create Voucher > press F10 (Other Vouchers) > type or select Debit Note > press Enter.
      Alternatively, go to Gateway of Tally > Vouchers > F10 (Other Vouchers) > type or select Debit Note > press Enter.
   2. Press Ctrl+H (Change Mode) and select the invoice mode per your business needs.
      • Party A/c Name: Select the party name.
      • Party Details: Provide the buyer details. You can provide the Receipt or Order details per your invoice requirements and you can also enter the Original Invoice No. and Date against which you have recorded the sales return.
        If you do not see the Party Details screen with options for Original Invoice No. and Date, then press F12 (Configure), and set Provide Dispatch, Order, and Export/Import details to Yes.
2. In the Ledger Account field, press Enter on Show More > select the Sales ledger to allocate the stock items. You can create the ledger on the fly by pressing Alt+C.
   
3. Provide the stock item details and enter the amount.
4. Select the bill-wise details against which you have recorded this transaction.
   
5. As always, press Ctrl+A to save.