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How do I record monies returned to a client from an Invoiced Sale?

How do I record monies returned to a client from an Invoiced Sale?

In KIS BOOKS the terms “Credit Memo” and “Credit Note” have two separate meanings. As an “aide memoire” the word Note in “Credit Note” means this is a cash transaction (cash has been refunded to a client). KIS BOOKS defines a “Credit Memo” as being a discount given on an unpaid invoice owed to you (no cash refunded in this case). Credit Memos are available only in the Accounts Receivable control.

These two events can have different Sales Tax reporting outcomes.

To record a “Paid Credit Note” tap one of the top eight Income account names. Then tap on the “Paid Credit Note” switch.

A warning message will appear if a Sales Tax reportable account is selected.

This can get a little tricky, but the purpose is to harmonize with any sales tax amount that was charged to your client on the original invoice. Since you or your client may have changed addresses and/or the sales tax rates have changed since that time then KIS BOOKS will require you to include any sales tax in the taxable value of the Credit Note. KIS BOOKS will use the Reverse Tax method on this taxable element and you can edit the sales tax rates to the rates that occurred at the time of the original invoice. The Credit Note will then give a proportional sales tax credit that may be eligible as a credit from the particular State. There may be a very rare situation where if you moved or your clients delivery address had changed then due to the automation in KIS BOOKS you may have to change your business address back to what it was at the time of the original invoice and/or your clients delivery address back to what it was at the time of the originating invoice– just for this transaction. If your client’s delivery address had not changed and the sales tax method was “Destination” then no change to your profile would be required. In either case you may need to carefully check that the correct sales tax rates have been applied.

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