Xero Help Needed Please!

[StuckonXero]

Hi, how do I allocate a credit note that we've issued to a customer and they've paid the bill already?

They paid in Nov and we've since issued them a credit note.

How have you refunded the payment?

Or is it a credit against a future invoice?

We issued a credit note after they'd paid the bill and they are wanting to have it deducted off their next payment to us.

Hmmmm - Could you un-reconcile the payment of the invoice, match the credit note and then mark the cash payment as a payment on account or prepayment?

I don’t think you can raise a credit note against a paid invoice so the above is a work around.

Sorry, am confusing things.

We issued a credit note against a sales invoice that they had already paid. They're making a payment and want to include the credit off their payment.

It is locked so can't unreconcile the payment?

Then you need to put the credit note on the customers account

Then when they next pay you will allocate it then

In this case, you don’t need to allocate the credit note against the initial invoice.

Instead, allocate a credit note against the next invoice that you issue.

Just raise an invoice on the customer account - in the description reference the original invoice

Then when you raise the next invoice offset the credit note

Sorry that should say raise a credit note on the customer account

just knock it off their next bill

write 'credit note' as the item line put the amount for the line as -£100 (or whatever the amount is for) make sure its No Vat in the tax column and then attach a copy of the credit note you issued to them as a file to that invoice.

You can’t ignore the VAT if there was VAT on the original invoice

Thanks for your help everyone.

@Scrowy

just knock it off their next bill

write 'credit note' as the item line put the amount for the line as -£100 (or whatever the amount is for) make sure its No Vat in the tax column and then attach a copy of the credit note you issued to them as a file to that invoice.

This is incorrect.

You just need to keep the credit note on their account and then when you raise the next invoice allocate the credit note to that invoice so that when you when they pay you they only pay the difference. Send them a statement so they know how much to pay you.