Overview
The Credit Note System provides a comprehensive solution for handling customer returns and refunds in accordance with proper accounting practices. Credit notes are the standard business documents for processing returns, providing formal documentation for both refunds and credit adjustments.
Key Features
Professional Documents
- Auto-generated credit note numbers (CN202412XXXX)
- Professional PDF documents with branding
- HTML versions for web display and email
- Terms and conditions included
Multiple Refund Methods
- Cash Refunds: Immediate payment
- Bank Transfers: For card/bank returns
- Credit Adjustments: Account balance credits
- Store Credit: Future purchase credits
Complete Audit Trail
- Full transaction documentation
- User attribution (created by, approved by)
- Timestamps for all status changes
- Links to invoices and accounting entries
Inventory Integration
- Automatic inventory adjustments
- Condition-based handling (good/damaged)
- Serial number tracking
- Write-offs for damaged items
Business Workflow
Customer Return Process
- Customer brings items back to store
- Staff member creates credit note in system
- Items are inspected and condition recorded
- Return reasons are documented
- Credit note is generated as draft
Approval Process
- Manager reviews credit note details
- Verifies return policy compliance
- Approves credit note (creates accounting entries)
- System updates inventory based on item conditions
Refund Processing
- Determine refund method based on original payment
- Enter customer banking details if needed
- Process refund through appropriate channel
- Generate final credit note document for customer
Documentation
- Print credit note for customer signature
- File copy for business records
- Email copy to customer if requested
- All transactions recorded in accounting system
Return Reasons
| Reason Code |
Description |
faulty_product | Manufacturing defects |
wrong_item | Incorrect product sent |
damaged | Shipping/handling damage |
customer_request | Changed mind |
| Reason Code |
Description |
duplicate_order | Accidentally ordered twice |
quality_issue | Doesn't meet expectations |
size_issue | Wrong size |
other | Other reasons (describe) |
Item Conditions
- Unopened: Original packaging
- Good: Excellent condition
- Used: Shows use but functional
Action: Added back to inventory
- Damaged: Physical damage
- Faulty: Defective/malfunctioning
Action: Written off as loss
Note
Condition assessment affects inventory handling and accounting treatment. Damaged items create expense entries, while sellable items return to stock.
Accounting Integration
IFRS Compliant
- Proper double-entry bookkeeping for all transactions
- Sales returns accounting entries
- VAT reversal handling
- Integration with general ledger
Typical Accounting Entries
When Credit Note is Approved:
Debit: Sales Returns Account P 1,000.00
Debit: VAT on Returns Account P 140.00
Credit: Accounts Receivable P 1,140.00
When Refund is Processed (Cash):
Debit: Accounts Receivable P 1,140.00
Credit: Cash Account P 1,140.00
For Damaged Items (Write-off):
Debit: Loss on Damaged Goods P 500.00
Credit: Inventory Account P 500.00
API Endpoints
| Method |
Endpoint |
Description |
| POST |
/api/v1/credit-notes/ |
Create new credit note |
| GET |
/api/v1/credit-notes/{id} |
Get credit note details |
| POST |
/api/v1/credit-notes/{id}/approve |
Approve credit note |
| POST |
/api/v1/credit-notes/{id}/process-refund |
Process refund payment |
| GET |
/api/v1/credit-notes/ |
List credit notes with filters |
| GET |
/api/v1/credit-notes/pending-refunds |
Get pending refunds |