How do Credit Notes work on Modulr Accounts Payable?

In this article we take a look at how Credit Notes work on Accounts Payable.

If you have received a Credit Note from a Supplier and also have an Invoice to be paid from that supplier, follow these steps below.

1. Go to Payments

 

2. Click on Select

 

3. Select an Invoice for a Supplier you also have a Credit Note for (this can be multiple invoices)

 

4. Select the Credit Note(s) you'd like to apply for that Supplier

 

5. Click on Pay

 

6. Note the amount to be paid is a net amount (invoice-credit note)

 

7. Click on Pay

 

How does my Supplier know I've applied a Credit Note?

As pointed out above, your supplier will be paid a net amount (invoices-credit notes). In the remittance advice email they receive for that payment, it will look like this:

How do you treat Credit Notes in my accounting software?

In your accounting software, we will create a Cash Refund for the supplier which will be auto-reconciled in your Accounts Payable GBP bank account.

(Xero example)