Fortunately until now I’ve not needed to use a Debit Note or Credit Note, but alas, now due to a quality supply issue, I have my first need to do so.
I’ve already prepared a Debit Note for the relevant Purchase Invoice to detail the reimbursement transaction which needs to happen to reflect the claim back for the cost of goods from the Supplier.
The Supplier has already remitted the funds to my company bank account.
My bank reconciliation is out by this exact amount.
I was looking for (expecting to see - intuitive) a receipt payment function button on the Debit Note page to do this next step, so not seeing one there, I went to the guides for help and found the guide a bit vague on this specific step. https://www.manager.io/guides/7426
Am I right in my understanding that the Debit Note doesn’t/cannot effect the record of this transaction, and the remittance must be recorded separately by a manual Receipt of Payment?
And if so, there can be the risk of one being amended/edited and not reflected in the other?
Your understanding is correct. Debit and credit notes modify what is owed. They do not record payments or receipts. This is because the amount credited might be left on account instead of being remitted. Or it might be applied to another invoice.
yes. since you have already issued the debit note to the supplier, the receipt transaction should be recorded to the supplier’s ledger which as per the guide is Accounts payable. you do not have to select the item purchased or the applicable tax rate for the item on the receipt transaction. these were already handled in your debit note. the receipt transaction only needs to record the movement of money to the proper ledger.
your supplier will refund the money only when you have already made payment against the purchase invoice. else you will record only the debit note and pay the balance to the supplier.
check the below screenshot to understand how the transactions affect the ledger.
Thanks @sharpdrivetek for that explanation, all fixed now, possibly a bit more details / steps in the guide would help others … it may seem obvious to those who developed it or use it regularly, but it threw me.
I think what confused you was your expectation the debit note and payment were more connected than they are. The Guide is actually quite specific that they are not.
Correct, I did think they were more connected than they were, my bad.
However I will make the suggestion that the guide would be more helpful to beginners if it included some screen shots of the Receipt Payment page indicating not to use the same account code as in the invoice, but instead to use the Accounts Payable, and step that process out a bit.
The screen shot in the guide is showing the end result, which is fine, however skipping the actual entry steps to get there.
With all due respect, there are a lot of very talented small & micro business owners in the world who are not trained & certified chartered accountants, however they will often possess sufficient basic book keeping skills to begin their entrepreneurial journey with Manager as their preferred accounting tool, and IMHO the guides should be developed to cater for all users, especially these hero’s.
Although the information is there I think that this sentence in the guide under Receiving a Refund could be better formulated:
If a supplier refunds the credit balance, receive money into a bank or cash account, allocating the refund to Accounts payable and the supplier’s subaccount.
with the following: If a supplier refunds the credit balance and you receive money into a bank or cash account then you should allocate the receipt of funds to Accounts payable and the supplier’s subaccount.
