How to Enter Credit Note in Tally ERP 9?
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Have you ever prepared Credit Note in Tally ERP 9 .If not, you can learn how to prepare a credit note in this tutorial. Credit note is an accounting document Issued by the seller to the buyer informing that his account has been credited due to sales return made by him.
For example a buyer bought goods for 1000 and returned goods worth 500. For seller it is a sales return. He has to return Rs 500 to the buyer or in other words he has to deduct 500 from his account. If the bill includes GST, The same has been entered in the credit note with same gst rate and tax applicable to the returning goods.
In Seller books of Accounts
When a customer returned to the seller,Seller has to account the return as sales return and issue a credit note to the buyer.
In Buyer Books of account
When a buyer is returning goods to the seller.The buyer treat the transaction as purchase return.and have to raise a debit note and send to seller along with returning goods.
Recommend Read: Prepare Debit Note in Tally.ERP 9
Other cases when credit note issued.
- Expense paid by parties on our behalf.
- Price difference in sales invoice.
- Discount given to parties after generating Invoice
Example with stock item
For entering , you have to activate it from F11 Configuration.
How to Activate Credit Note in tally erp 9?
You should go to the following screen.
F11 Features> Inventory Features
F11 Inventory features are available from almost all screens of Tally.
- Enable Use debit and credit notes
- Record credit note in invoice mode: Set yes if required
Save and accept the Features screen. Credit not voucher will have activated.
How to enter Credit note in Tally?
Now let’s enter the above transaction in Invoice Mode.
Gateway of Tally>Accounting Voucher> Credit Note
Shortcut Key to Access this is voucher is Ctrl + F8. The voucher will look like this image.
To enter in Invoice mode,
- Click on item invoice button for entering with stock item
- Click on As invoice button to enter as Invoice mode.
Ledger Required for the Entry.
We need the following Ledger Account.
- Customer (Sundry Debtors) Ledger, This must be already created while you generating sale invoice.
- Sales Return Ledger
Create a sales return ledger under group sales if not already created. You can use sale ledger also instead of creating a separate sale ledger.
Now enter all the details as follows in the order mentioned below.
- Change the date by pressing F2 in which credit note is entered.
- Original Invoice No: The Invoice number of sale bill.
- Original Invoice Dt: The date of Sales invoice.
- Party A/c Name: The name of party who returned the goods.
- Sales Ledger: The Sales Return Ledger created.
- Name of Item: The commodity retuned by customer, cement.
- Enter Quantity rate of the commodity returned.
- Enter narration if required.
Press enter to accept and save.
Credit note entry with GST
Let’s take the same example with GST.
Additional ledger required for entering credit note with gst
- In the sale invoice you must have included tax ledgers like SGST & CGST For local sale and IGST for interstate sale.For entering credit note also same ledgers are required.
- While creating customer ledger, you must be careful about entering the right state , type of registration, GSTIN.
- Create stock item with GST activated.You can set gst rates at company level, ledger level, group level etc. Set gst rate as per your company requirements.
To enter sales return transaction with gst in credit note
In the credit note voucher select the party name, original sale bill, sale bill date as explained above.
In addition to the above select the gst tax ledger, CGST & SGST as it is a local sale return.
In case of Interstate return, select the IGST ledger,
At the end of the screen, you will find option ‘Provide GST details‘ make this Yes, you can enter additional details about the sales return as shown below.
- Select the reason for generating debit note listed in the box.
- Enter Buyer’s Debit note No.
Here is the screen shot of GST sales return Credit note.
Entry in Normal mode
To enter credit normal mode you have to disable invoice mode, To do that go to
F11 Featues > F2 Statutory Features
Record credit note in invoice mode: No
Now let’s create this in accounting mode. In which no stock item involved
Examples of normal mode.
Enter the date
- Credit the party ledger
- Debit the expense paid by party on our behalf.
- Enter amount.
Press enter to accept and save the screen.