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This guide covers credit notes for accounts payable. Monite also supports credit notes for accounts receivable.

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Overview

A credit note is a legal document used to reduce the amount owed on a payable after it was issued. Entities would typically use credit notes in the following cases:
  • An issued payable contains a mistake (for example, wrong product or quantity).
  • The order needs to be changed after the payable has been issued.
  • The order was canceled by the entity or the customer (counterpart).
Credit notes can be used to partially reduce the payable amount as well as fully cancel a payable. Multiple credit notes can be issued for the same payable. However, the total amount credited cannot exceed the payable amount.

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Roles and permissions

To create and manage credit notes using an entity user token, this entity user must have a role with the payables permission. If a partner-level token is used, no special permissions are needed.

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Use cases

Monite API supports the following use cases for credit notes:
  • Reduce quantities of line items.
    Example: a payable was issued for 10 laptops, but only 8 were actually delivered. A credit note can “cancel” the remaining 2 laptops that were not delivered.
  • Reduce the price of some or all units within a line item. (Essentially applying a discount.)
    Example: A product was mistakenly billed as € 210 instead of € 200. A credit note can correct the price back to € 200.
  • Credit the full remaining amount of a payable. This cancels an unpaid payable, or marks a partially paid payable as paid.

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Considerations and limitations

  • Credit notes can be created only for payables in the waiting_to_be_paid, partially_paid, and paid statuses.
  • Credit notes for partially paid payables can be used to reduce only the quantity of line items, but not the unit prices.
  • If a credit note cancels the full remaining amount of a payable in the waiting_to_be_paid or partially_paid statuses, the payable is automatically moved to the paid status.
  • Changing line item VAT rates via credit notes is not supported.
  • If a payable includes several line items for the same product, credit notes cannot be used to update those specific line items. However, other line items on the payable can be updated.
  • If a counterpart’s address or contact information was changed after a payable was issued, you can provide the updated counterpart address or contact information via a credit note. However, the updated information will only appear in the credit note; the information in the original payable is not changed.