Debit Note - Inventory Adjustment

Hi all,

I have done a Debit Note for an inventory item that i have received wrong and when a Debit Note is created for a received inventory item against an invoice, it does not adjust the stock (goods receipts).

Screen shot taken before Debit Note

Screen shot taken after Debit Note

Goods Receipt/Inventory after Debit Note not adjusted

I think since the user selected an inventory item when entering the Debit Note, Manager should deduct the item from stock automatically, otherwise:

  • if the user just want to apply a monetary value it will simply select the posting account desired to affect and add the item description (no stock adjustment); or

  • “as an idea” have the option to select straight from the Debit Note if the stock for such item should be affected or not (see below screen shots).

Now for the time being as a workaround should i create a “Goods Receipt” with a negative quantity for this item since i will be returning the item back to the Supplier?

Thank you much.

if you have enabled Goods Receipts, then you should record a goods receipt for the debit note.
this applies to credit notes too where you should create a delivery note if the Delivery Notes tab is enabled.
this is not a workaround but it is as designed.

please note that the Goods Receipts quantity for the inventory items should be entered as a negative value. this happens automatically if you select the Copy To function from your Debit Note.

Thanks, i did not remember to check the Copy to function. :+1:

@sharpdrivetek i have just faced another problem related this subject, the supplier overcharged for an item and issue a Credit Memo to me. Now this Debit Note its just a price adjustment in which i have followed Manager normal procedures (Purchase Invoice > Copy to > New Debit Note > kept only to item that Debit Note applies > kept the same QTY (2) > entered the unit value for the difference), result: now Manager is expecting to receive an item that its not supposed to receive (screen shot below).

I can easily post the credit value to the item cost account in the Debit Note and the stock problem is solved, but it defeats the purpose to track what happens to the item (i.e.: Inventory Profit Margin and other Reports related will not be accurate), agree?

@lubos i think the Debit/Credit Note interaction with Inventory could be reviewed if my examples above makes sense to you. I am just trying to make a great software even better!


When there is no movement of inventory but only the cost associated with it, you should not be entering any quantity for the inventory item in your debit note. Just select the inventory item and enter the amount alone. In this case there is no goods receipt needed.

I tried the same before sending my last post, but the system does not calculate when the Qty is zero (0), see screen shot below.

I am not having this issue with the debit note not costing out with zero quantity:

Just noticed that you have a “0” under Qty, the quantity field needs to be blank otherwise you are multiplying the Unit Price by zero, which results in zero.

Hi @Brucanna well noticed!

it worked but now when looking at the item inventory details, the system created this entry when looking at Inventory Items > Item > Qty Owned

The item had no negative stock count as you can see on the screen shot above.

It also shows Unspecified Location when looking at the Item Qty on Hand

Here is the Inventory Location i have (Settings > Inventory Locations)

I just want to make sure that i will not have problems in future because of it.


did you select the necessary Inventory location in your debit note? the field appears above the line items after you select an inventory item.

EDIT: since you have the Goods Receipts tab enabled, the explanation provided by @Tut in the below post will be applicable.

If you were not using the Goods Receipts and Delivery Note tabs, that is exactly what would have happened. Using those tabs separates cost and quantity calculations. The results are as illustrated in @sharpdrivetek’s responses. This is why the Guides on Goods Receipts and Delivery Notes caution you to think carefully before enabling them.

The program had to do something with the cost because you did not have any inventory on hand to which to apply the adjustment when the debit note was entered. Basically, it saves the adjustment for later, when new inventory is acquired. The process is the same one used when inventory goes negative, so the wording does not change. But this is normal. You just happened to encounter an unusual situation, in which your customer gave you a price credit on something you no longer owned.

Once you enable Goods Receipts, you can no longer specify an inventory location on debit notes. That function is shifted to the goods receipt. Therefore, the debit note transaction is applied to the Unspecified location. But, because there was no quantity, nothing happened.

There will be no future harm. But, since you only have one location, the use of inventory locations is an unnecessary complication that will get in your way routinely. You should consider transferring all inventory to the Unspecified location and deleting Office (unless you are going to add more inventory locations soon). If you continue with our Office location, the Unspecified location will always show. This would be true whether or not this debit note situation had occurred. That location always shows, because it is the default location.

Thanks @Tut, since it will have no future harm, its all good.

I have just checked the Report > Inventory Quantity by Location and the item in discussion it is no there, so it is only showing Unspecified Location because of the item not being in stock when the Debit Note was created like you said.

Thank you.