What is Credit note?

A credit note voucher or credit memo is a commercial document issued by a seller to a buyer. Credit notes act as a source document for the sales return journal. In other words, the credit note is evidence of the reduction in sales.

Reasons for Sales Returns

  1. Damages
  2. Expiration of products
  3. Different brands
  4. Out of order

How to Enable Credit note in tally?

  • Gateway of Tally —> Vouchers —> Other Voucher(F10) —> Credit note (Alt + F6)

How to change mode in tally?

  1. Gate of tally
  2. Vouchers
  3. Credit Note (Alt + F6)
  4. Change mode (Ctrl + H)
  5. Select as Voucher

Do the following entry

01/04/2021Company sold goods worth of Rs.50, 000 to Meenakshi and Co with bill no. min/apr/001
01/04/2021Company received worth of Rs. 50,000 from Meenakshi and Co against bill no. min/apr/001
02/04/2021After checking the goods, Meenakshi company has returned damaged goods worth of Rs.5, 000 to Company with bill no. min/apr/cr/note/01

Sales Voucher (F8): –

01/04/2021, Company sold goods worth of Rs.50, 000 to Meenakshi and Co with bill no. min/apr/001

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Receipt Voucher (F6):-

01/04/2021, Company received worth of Rs. 50,000 from Meenakshi and Co against bill no. min/apr/001

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Credit note (Alt + F6): –

On 02/04/2021, After checking the goods, Meenakshi company has returned damaged goods worth of Rs.5, 000 to company with bill no. min/apr/cr/note/01.

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You can view credit note report as follow

  • Gateway of Tally —> Display more report —-> Account Books—>Credit Note Register

Do the following entry as given below

Example (1)

01/05/2021Company sold goods worth of Rs.30, 000 to Akash and Co with bill no. akash/may/001
01/05/2021Company received worth of Rs.30,000 From Akash and Co against bill no. akash/may/001
02/05/2021After checking the goods, Akash and company has returned damaged goods worth of Rs.5, 000 to company with bill no. akash/may/cr/note/01.

Example (2)

01/06/2021Company sold goods worth of Rs.80, 000 to Ram and Co with bill no. ram/June/001
01/06/2021Company received worth of Rs. 80,000 From Ram and Co against bill no. ram/June/001
02/06/2021After checking the goods, ram and co. has returned damaged goods worth of Rs.8, 000 to company with bill no. ram/june/cr/note/01

Example (3)

01/07/2021Company sold goods worth of Rs.1,00,000 to Shiva ltd with bill no. shiv/July/001
01/07/2021Company received worth of Rs. 1,00,000 From Shiva ltd against bill no. shiv/July/001
02/07/2021After checking the goods, Shiva ltd has returned damaged goods worth of Rs.10, 000 to company with bill no. Shiva /july/cr/note/01

Example (4)

01/08/2021Company sold goods worth of Rs.60, 000 to Dhawan and Co with bill no. dhawan/aug/001
01/08/2021Company received worth of Rs. 60,000 From Dhawan and Co against bill no. dhawan/aug/001
02/08/2021After checking the goods, Dhawan and co. has returned damaged goods worth of Rs.5, 000 to company with bill no. dhawan/august/cr/note/01