United States United Kingdom Australia Canada (English) Canada (French) France Singapore South Africa Global Ireland
cancel
Turn on suggestions
Auto-suggest helps you quickly narrow down your search results by suggesting possible matches as you type.
Showing results for 
Search instead for 
Did you mean: 
Announcements
NEW Connect to DBS IDEAL direct bank feeds Click here
varley-janine
Level 1
posted
‎May 02, 2024 01:02 AM
last updated ‎May 02, 2024 1:02 AM

Can I offset a credit note against expense? The credit note was raised, Please help?

I have a credit note on a customer account, the funds were refunded from bank and it was captured as an expense. The account is Nil but I cannot offset the expense against the CN which is now affecting the end balance on the Balance Shet. How do I clear it? It now reflects incorrect balances on accounting reports.
Reply
1 Comment 1
Nicole_N
QuickBooks Team
QuickBooks Team
‎May 02, 2024 03:32 AM

Can I offset a credit note against expense? The credit note was raised, Please help?

 

You can apply a credit note to an expense transaction to maintain accurate accounting records in QuickBooks Online (QBO), Janine. I'll go over some details to help you achieve the task. 

 

To begin with, let's create a new expense transaction with the Accounts Receivable (AR) as the Category. Then, apply the credit note to offset the expense. I'll guide you on how:

 

  1. Click the +New button and choose Expense.
  2. Select a supplier from the Payee field.

    image (6).png

  3. Under the Category details, choose Accounts Receivable (AR) as your category.
  4. Enter the Amount and the Customer for the credit note. 

    image (7).png

  5. Once done, click Save and close.

 

After that, let's apply the credit note to the expense. Here's how:

 

  1. Click the +New button and choose Receive Payment.
  2. From the Customer dropdown, select the customer.
  3. In the Outstanding Transactions section, tick the box for the open expense.
  4. In the Credits section, tick the box for the credit note you want to apply.
  5. For the open expense in the Payment column, enter how much of the credit you want to apply.
  6. Leave the Payment method, Reference no, Deposit to, and Amount received fields blank.
  7. Fill out the rest of the form, including the Payment date.

    image (5).png

  8. Make sure the total is correct after applying the credit note.
  9. When you're done, select Save and close.

 

On the other hand, if you have other categories linked to your expense transaction, then it's best to reach out to your accountant for the best course of action you need to take. If you're not affiliated with one, you can visit our ProAdvisor page.

I'm adding these articles for your future guide about recording refunds in QuickBooks:

 

 

Let me know in the comments below if you have further questions about credit notes in QuickBooks. Just hit the reply button below and I'll surely get back. 

Reply