Credit Note Issue

Hi there,
I issue an Invoice. - 1000.00
The Client pays. - 1500.00
I issue a credit note for - 500.00
Balance due on the invoice - 1000.00

All correct so far - But then:-

I issue the next invoice for 1000.00
I expect the Program to deduct the 500.00 the Client overpaid the previous invoice, making the balance due 500.00?

However, this does not happen - The new invoice states - Balance due 1000.00
No reference on the invoice of the credit note for the 500.00?

Can someone help?

I just entered these transactions in to a test company and got this result


First invoice

Second invoice

Are you using the latest version of Manager?

There is no need to create this credit note. When the client pays 1500, just don’t allocate that payment to an Invoice number, Manager will just keep that overpayment and will allocate it to the next Invoice.

The question of whether Manager applies overpayments to subsequent invoices depends on whether you specify a receipt as applying to a specific invoice or not. Read this Guide for some background: Manager Cloud. Basically, an overpaid status will remain on a specific invoice if excess receipts have been allocated to that invoice. This is to prevent confusion when customers designate receipts for a specific invoice or invoices. Even though the customer has erred, it is often wise to avoid rolling application of excess receipts that complicate future invoices.

But your example confuses me. You outlined a 1500 receipt from the customer and a 500 credit note against a 1000 sales invoice. Yet you wrote the balance due was still 1000. The balance due in that situation would be -1000 (note the minus sign), indicating overpaid status.

Maybe the balance due you mentioned was a typographical error. Assuming that is the case, if both receipt and credit note are specified for the first 1000 invoice, it will remain overpaid. If neither is, the 1000 credit balance for the customer will be applied automatically to the second 1000 invoice.

As for the credit note itself, you have misunderstood its purpose. Credit notes reduce the amount owed by the customer, such as when goods are returned to you. The amount owed by the customer in your example was not reduced. The customer just overpaid. So, had you not expected to issue another sales invoice to that customer, the proper course of action would have been to refund the money, posting the payment to Accounts receivable for that customer.

Hi there,

Thank you for the reply.

Maybe I was not clear in my explanation - I will try to do better

  I have a Client who receives an invoice from me for 1000.00 -

However, he decides to pay more (500.00) to have credit on his
account. - It would then mean he has actually paid 1500.00 instead
of the 1000.00

  I then receive the money in the Bank and input the amount he

actually paid (1500.00)

  But when I add a credit note for the 500.00 to his invoice - I

expect the next invoice to show 1000.00 as invoiced, Minus the
previous Credit of 500.00 - Thus leaving a balance of 500 for him
to pay

  I may be doing something wrong - When I create the new invoice -

The extra 500.00 credited does not show on the new Invoice - It
only shows due 1000.00

  I need to know how to allocate extra funds paid by clients so it

automatically deducts the extra funds paid on a previous invoice,
from the next invoice.

Your help is greatly appreciated.


Your explanation was clear, but please look at the maths.
You invoiced 1000, client paid 1500, so their account has 500 credit balance. You issue credit note for 500 so now their account has 1000 credit balance. So when you issue the next invoice for 1000 then it should be fully paid, not have a balance of 500 or them to pay.

What you need to explain is this - why are you creating the credit note ?
If you are creating the credit note because the client over paid - then this is totally wrong.

As previously explained, to allocate the extra funds from the 1500 payment to the next invoice, DON"T nominate an invoice number when you are doing the Receive Money for the 1500.

Thank you all for the assistance.

I have resolved the issue.