How to Create a Manual Customer Credit Note | Latner Software Documentation

A manual customer credit note lets you credit a customer for charges that aren't tied to one particular invoice, so you can correct a billing error or record a goodwill adjustment without unwinding work that has already been billed.

Overview

Not every credit starts life attached to an invoice. Sometimes you just need to put an amount back on a customer's account and decide later where it lands. That's what a manual credit note is for.

You create it from Customer Invoices, and Latner records it with a Type of Credit Note and a Source of Manual.
It's created in Open status, so you can build up the lines before anything is finalised.
Credit lines use the same line types as an invoice - Admin, Equipment, Stock, Fuel, Labour, Transport, Sanitation and the rest.
Amounts are entered as positive values. Latner treats the whole document as a credit; you don't type minus signs.
Completing it turns the total into available credit that you can allocate against a completed invoice or refund to the customer.
It gets its own number, taken from the Customer Credit Note Number Format setting, so credit notes and invoices never share a number sequence.

Before You Begin

Make sure the following are in place before you start.

Requirement	Where to Find It
Create Credit Note permission	Security › Configuration › Permission Groups, under the Customer module's Options section
An Active customer with at least one customer site	Customers › Customers
Customer Credit Note Number Format - the prefix and number of digits for credit note numbers	Security › Settings › Customers
Enforce Credit Note Approval Limits - optional, and only if your business wants approval limits policed	Security › Settings › Customers
A Credit Note Approval Group with line type limits, needed only when the setting above is enabled	Customers › Configuration › Credit Note Approval Groups

Enforce Credit Note Approval Limits, found by choosing Customers in the Modules panel and searching the settings list

With Enforce Credit Note Approval Limits switched on, whoever completes the credit note must belong to a Credit Note Approval Group that carries a limit for every line type on it. Latner compares each line type's combined sub total against the user's highest limit for that line type, so a $900 credit made up of $500 of Admin and $400 of Fuel needs a limit against both. Leave the setting off and any user with the Create Credit Note permission can complete one.

Creating the Credit Note

Step 1 - Open the Customer Invoices screen

Go to Customers › Customer Invoices and choose Options › Create Credit Note. Credit notes live on this same screen alongside invoices - filter the Type column by Credit Note to see only credits.

the Customer Invoices screen with the Options menu open; invoices and credit notes share this list, told apart by the Type column

You'll also find the same action as Options › Create Manual Credit Note on any existing credit note, which is handy when you're already looking at one and need another.

Step 2 - Fill in the credit note header

The Credit Note dialog only asks for what Latner can't work out for itself.

Customer - required. Only Active customer accounts appear; prospects and suppliers are excluded.
Customer Site - required. Once you pick a customer the list narrows to that customer's sites, and choosing a site on its own fills the customer in for you.
Branch - required. The branch owns the credit note for reporting and drives the dates it stamps.
Source - fixed to Manual and read-only. It's shown so the document's origin is obvious later.

the completed Credit Note dialog; Source is locked to Manual, which is what makes this a manual credit note rather than one raised from an invoice or contract

Step 3 - Save

Select Save and Latner opens the new credit note. It fills in the rest from the records you chose: the billing contact comes from the customer site, falling back to the customer's own billing contact; the billing address comes from the customer; the credit date is today in the branch's timezone; and the payment terms come from the customer, or from the Default Payment Term setting when the customer has none.

The credit note is created in Open status with a total of $0.00, ready for its lines.

the new credit note in Open status; the Amount Owing card stays at zero until lines are added

Step 4 - Add the credit lines

Choose Options › Add Credit Note Detail. This action is only offered while the credit note is Open.

Line Type - required, and pick it first. The field beside it changes to match your choice, asking for a Stock Number, Equipment, an Admin Charge, an Expense Type, a Transport Type, a Fuel Type, a Line Sub-Type or a Sanitation Service.
Description - prefilled from the record you selected. Overwrite it with something the customer will understand, because this is what prints on the credit note.
Unit Price - prefilled where the selected record carries a price (an admin charge's default charge, a fuel type's retail price, a stock item's retail price). Enter it as a positive amount.
Quantity - required.
Sub Total - read-only. It previews unit price times quantity, and Latner recalculates the real sub total, tax and total on save using the credit note's tax rate.

Repeat for each thing you're crediting. Lines are numbered in the order you add them.

an Admin credit line; choosing the Admin line type swaps the second field to Admin Charge and pulls through the charge's description and default price

Step 5 - Check the lines and the totals

The Details tab lists every line, and the Amount Owing card adds them up as Total Credit, Refunded Credit, Used Credit and Remaining Credit. Tick a line to edit or delete it - both are only possible while the credit note is Open, and the line type of an existing line can't be changed.

the Details tab with one credit line; Remaining Credit already reflects the line's tax-inclusive total

Step 6 - Complete the credit note

Choose Options › Complete Credit Note. The action stays greyed out until the credit note has at least one detail line.

If your business routes credits past someone else first, use Options › Request Approval instead. That moves the credit note to Pending Approval, assigns it to the user you nominate and notifies them. On their screen the action reads Approve Credit Note, and Reject Credit Note puts it back to Open for more work.

the Options menu on an Open credit note; Refund Payment and Allocate Credit stay disabled until the credit note is completed

Once completed, the status changes and Latner stamps who completed it and when.

the completed credit note; Date Completed and Completed By are filled in and the credit is now available to use

After Creation

The credit note is pushed to any active accounting integration, and each attempt is recorded on the Integration Syncs tab.
Options now offers Allocate Credit, Refund Payment, Generate Credit Note PDF, Email Credit Note, Mark Credit Note as Sent and Change Credit Note Date.
Allocate Credit applies the credit to a completed invoice for the same customer, for no more than the smaller of the invoice's outstanding balance and the credit note's remaining credit.
Refund Payment pays the credit back to the customer instead, again capped at the remaining credit.
When the remaining credit reaches zero through allocations or refunds, the credit note's status becomes Paid.
The credit note appears in the Customer Invoices list with a Type of Credit Note, and on the customer's daybook.

the Options menu after completion; allocating, refunding, emailing and syncing all unlock at this point

Completing a credit note locks it. You can no longer add, edit or delete its lines, and the customer, site, billing contact and credit date on the General Details card become read-only. If you completed one by mistake, use Options › Cancel Credit Note (this needs the Cancel Customer Invoice permission) and raise a fresh one. If only the date is wrong, Change Credit Note Date fixes that without cancelling anything.

FAQs

Create Credit Note doesn't appear in the Options menu. Why?

The action is gated by the Create Credit Note permission. Ask an administrator to enable it for your permission group under Security › Configuration › Permission Groups, in the Customer module's Options section. The same permission controls Request Approval, Complete Credit Note and editing the General Details card.

Complete Credit Note is greyed out. What's missing?

A credit note needs at least one detail line before it can be completed or sent for approval, and the menu tells you so in its tooltip. Add a line through Options › Add Credit Note Detail and the action becomes available.

Should I enter the amounts as negative numbers?

No. Enter positive unit prices and quantities - the document is already a credit, so Latner handles the direction for you. A credit note whose total comes out below zero can't be completed at all.

I credited a Stock line. Why hasn't the stock come back into the warehouse?

That's deliberate. A manual credit note is a financial adjustment, so completing one never moves stock quantities, even when a line points at a stock item. If the goods are physically coming back, return them through the stock or work order process that sold them; use the credit note only for the money.

Can I change the customer, site or credit date after saving?

Yes, while the credit note is Open or Pending Approval. Customer, Customer Site, Billing Contact, Credit Date and Sales Rep can all be edited in place on the General Details card. Once the credit note is completed those fields lock, and only Change Credit Note Date can move the date.

Latner won't let me complete the credit note and mentions approval limits. What now?

Your site has Enforce Credit Note Approval Limits enabled. The message names the line type at issue and the limit the credit note needs. Either have someone with a high enough limit approve it, or ask an administrator to adjust your Credit Note Approval Group under Customers › Configuration › Credit Note Approval Groups. Note that limits are held per line type, so a credit spanning several line types is checked against several limits.

How do I actually apply the credit to an invoice?

Use Options › Allocate Credit on the completed credit note. Both documents have to be Completed and belong to the same customer, and the amount can't exceed either the invoice's outstanding balance or the credit note's remaining credit. See How to Allocate Credit Note to a Customer Invoice for the full walkthrough.

Can a manual credit note be linked to a specific invoice?

Not from this flow - a manual credit note stands alone until you allocate it. When you already know which invoice you're crediting, start from the invoice instead and use Create Credit Note there. That copies the invoice's details across and records it against the invoice as Credit Note for Invoice.

Watch the Demo

Prefer to watch it? Step through the same flow here.