How to Return or Replace Products and Create Credit Notes in Qoyod

Returning a Sales Invoice Using Credit Note in Qoyod System

The Qoyod system allows you to return sales invoices or modify their accounting effect by creating a credit note, which is an official accounting document used to reverse the effect of a previously approved or paid sales invoice, without the need to delete the original invoice, to preserve the integrity of accounting records and reports.

First: What is a Credit Note?

A credit note is a document issued by the seller to the customer who has returned goods, serving as proof from the seller that the customer has a right to be paid, such as sales returns. In the future, the customer can use the credit note to reduce the value of invoices owed, or request a refund, depending on the company’s sales policy.

A credit note is an accounting document that does the following:

• Creates a new offsetting accounting entry to the entry created when the sales invoice was issued

• Reduces the customer account by the credit note amount

• Automatically reverses the sales tax associated with the invoice

• Returns the quantity to inventory if the products are tracked in inventory

• Keeps the original invoice unchanged and undeleted

Important Accounting Note

There is no separate account called “Sales Returns” in the system; instead, the original entry is reversed directly through the credit note.

How to Review the Accounting Entry of the Credit Note

You can view the resulting entry through:

• Reports → Journal
  Then specify:

• You can select in the filter document type: Credit Note

• Add the document number (credit note number)

Second: When do you use a Credit Note?

Use a credit note in the following cases:

• Returning goods after issuing a sales invoice

• Discount after issuing a sales invoice for non-tracked products

• Correcting a sales invoice that cannot be deleted after approval

• Partial or full return of a sales invoice

• Replacing a product with another product after invoice issuance

Third: When should you NOT use a Credit Note?

It is not recommended to use a credit note in the following cases:

• For discounts on tracked products (because the credit note will return the quantity to inventory)

Fourth: What happens after creating a Credit Note?

1) Customer Account

• The customer account is automatically reduced by the credit note amount

2) Tax

• Sales tax is automatically reversed within the accounting entry of the credit note

• It is reflected in the tax return under the “Adjustment” section

• It leads to a reduction in sales tax payable

3) Inventory

• If the product is tracked in inventory:

  • The quantity is returned directly to inventory and you can verify the inventory quantity through Reports and then the product locations report.

• If the product is not tracked in inventory:

  • There is no impact on quantities because the product has no inventory.

4) Reversal or Modification

• A credit note cannot be deleted after approval

• To cancel the effect of a credit note, you must:

  • Create a new sales invoice with the same details as the credit note

  • Allocate the credit note to it

Fifth: Credit Note Usage Scenarios

Scenario One: Returning a Paid Sales Invoice (Status: “Paid”)

Detailed Steps:

1. From the main menu:

   • Sales and then Sales Invoices

2. Click View next to the invoice you want to return

3. At the bottom of the invoice page, click Return Invoice

4. A credit note is automatically created with all invoice details

In case of partial return:

• Delete the products not being returned using the (×) mark

• Adjust quantities as needed

1. Save the credit note:

• Save and Approve (if you have the authority)

• Or Save Pending Approval if you do not have the authority to approve credit notes.

1. After saving the credit note, click the “Refund” option next to the credit note to refund the amount to the customer.

2. A payment voucher will be created:

   • Select the account (cash / bank)

   • Select the date

   • Select the amount (editable for partial refunds)

3. Click Save

Very Important
A credit note cannot be allocated to an invoice with the status Paid.

Important Note About the Returned Invoice:
If a sales invoice is returned in whole or in part, its status in the sales invoices page will change to “Returned” alongside the original status. At that point, the “Return Invoice” option will not appear below the sales invoice.

To return an additional portion of the returned invoice, follow these steps:

1. Go to the Sales menu and then Sales Invoices.

2. From the top options, click on “Credit Notes”.

3. Click on “Create Credit Note”.

4. Add the sales invoice number in the “Original Sales Invoice Number” field and the invoice details will appear.

5. Add the quantities to be returned.

6. An alert will appear: “This invoice has been returned through credit notes 6. Are you sure you want to continue?”, you can click “Yes” to continue.

7. Save the credit note.

Scenario Two: Sales Invoice is Paid but You Want to Convert the Amount to Customer Credit Instead of Refunding

If the invoice is Paid but you want to convert the amount to customer credit instead of refunding it in cash:

1. Go to the sales invoice

2. Click View

3. Click on the Payment Voucher name below the total

4. Click the delete mark (×) next to the invoice number

5. The invoice status becomes Approved

6. You can now:

   • Allocate the credit note to it

7. And then allocate the customer credit to a subsequent invoice when adding it.

Scenario Three: Approved Invoice (Not Paid)

1. After creating the credit note

2. Click Allocate Credit Note

3. Select:

   • The invoice (you can choose a sales invoice or select the option “External reference to original sales invoice” if the sales invoice was previously added in another program before migrating to Qoyod)

   • The amount to be allocated

You can:

• Allocate the credit note partially

• Allocate it to multiple invoices

• Allocate it over different time periods

Important Alert
If the fiscal year is closed, you cannot allocate the credit note to a closed period.

Scenario Four: Returning a Product and Replacing it with Another Product

1. Create a credit note for the returned product by clicking View next to the sales invoice and then selecting “Return Invoice” from below the sales invoice and specify the returned product

2. Save the credit note

3. Create a new sales invoice with the replacement product

4. If there is a price difference:

   • Refund the amount

   • Or allocate the credit note to the new invoice

Sixth: Another way to create a Credit Note through the Credit Notes page (without entering the invoice)

1. From the main menu:

   • Sales → Sales Invoices

2. From the top options select Credit Notes

3. Click New Credit Note

4. Select:

   • The customer

   • The invoice (you can choose a sales invoice or select the option “External reference to original sales invoice” if the sales invoice was previously added in another program before migrating to Qoyod)

   • Reason for issuance (goods return / discount)

5. Enter the products and quantities

6. Save the credit note

Seventh: Credit Note Options After Creation

After creating the credit note, the following options will appear:

• View: Review the credit note

• Print: Print the credit note

• Download PDF: Download the credit note as PDF

• Allocate Credit Note: Allocate it to unpaid invoices

• Refund: Return the amount to the customer (cash or bank)

• Delete:

  • Available only if:

    • The credit note has not been allocated

    • And no refund has been made

    • And e-invoicing has not been activated

• Unallocate Credit Note:

  • Select the invoice

  • Click Save

• Send to Customer Email

Credit Note Statuses After Saving and How the Status Changes from Unused to Used:

• Used: The credit note has been allocated to a sales invoice.

• Partially Used: Part of the credit note has been allocated to a sales invoice.

• Draft: The credit note has been saved as a draft and not finalized. It has no effect and no entry is reflected until approval.

• Unused: The credit note has been saved and approved, but has not yet been allocated to any sales invoice. To change it to Used or Partially Used, you must allocate the credit note to an invoice.

• Pending Approval: The credit note has been saved by a user who does not have the authority to approve credit notes and must be approved for finalization by a user with the authority to approve credit notes by clicking View next to the credit note and then clicking “Save and Approve”, in which case it is considered a draft and has no accounting effect until it is finalized and approved.

Sales Invoice Statuses After Dealing with a Credit Note

• The credit note does not change the invoice status by itself.

• The change occurs only when:

  • Allocating the credit note to the invoice.

  • Or refunding through a payment voucher.

Sales invoice statuses when allocating a credit note to it:

• Approved: No credit note or voucher has been allocated.

• Partially Paid: Part of the credit note or voucher has been allocated.

• Paid: The allocation or payment is complete.

Eighth: Very Important Notes

• Credit note is for sales invoices only

• Debit note is for purchase invoices only

• You cannot:

  • Create a credit note for a purchase invoice

  • Create a debit note for a sales invoice

• You can allocate the credit note through the Additional Information tab on the page above:

  • Project

  • Additional field

• You must specify the location from which the invoice and quantities were returned through the location icon in the credit note.

  • A warning message appears

  • It can be disabled from:
    Settings → Credit Note Settings
    Then disable the option
    Show a warning message when returning an invoice if it is linked to multiple credit notes.

    When attempting to create a duplicate credit note, a warning alert only appears. The system does not prevent creation.

Ninth: Exporting Credit Notes

You can export credit notes through:

• Sales → Sales Invoices

• Credit Notes

• Click the Export icon at the top of the page

Training Video

Practical explanation of returning sales invoices:
https://www.youtube.com/watch?v=nXOtPVU1QZU

Here is an explanatory and practical educational video:

https://app.storylane.io/share/ybbxagvidx1q

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