Applying a credit made form sales invoice

I have been able to make a credit note against a sales invoice. This wasdone usimg this instruction:

BUt, now I want to use this against a new invoice. How?

Iam at a loss.



Hi @smokinjo,

When you create a new Sales Invoice then enable the “Is Return”.

Then it makes a credit note without any depend on the invoice/delivery note.

Thank You!

You can use payment reconciliation to adjust the credit note amount in the new invoice.


OK, this is not what I did. I did it as per the instructions that I posted.

I like your new idea since I do not need to do it against a previous invoice.

But, my initial quetsions still remains:

How do I apply this credit note to a sales invoice?




Thanks for the comment.

I do not know what a payment reconciliation is, how it works or how to use it.

Can you offer some guidance?

You can check these

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Hello again.
I tried the payment reconciliation.
I created a credit note by returning the item in question.
After doing this, In the list of invoices, the invoice with a returned items turned gray and says “credit note issued”. There is also a new entry marked “return” with the item that was returned and a negative amount showing that money that I can apply to another purchase invoice from that supplier.

Now, I go to enter a new payment reconciliation,and all the outstanding invoices are listed.

But,while it lists the outstanding invoices, none of the credit notes appear.

Where do I find them so that I can apply them to a purchase invoice?

When you have created a return, it is for a customer & not a supplier.

You have to create a payment entry for the return amount.

Follow the documentation.


You are right, this is for a sales invoice. My typo.

As for the payment entry, the page that you showed me only shows the reconciliation.

How do I make a payment entry that uses/links the returned item? This seems to be the element that I am missing. The payment reconciliation makes sense to me, so I understand this part.



I reread the simple 3 step process that was laid out in the procedure:

  • First, create a Credit Note against an Invoice
  • Then create a Payment Entry for the return amount
  • Use payment reconciliation to knock-off Payment against the original Sales Invoice (and not the Credit Note itself).

When doing step number two: create payment entry
I can make a payment, but in the context it seems to suggest making a generic, unapplied payment entry.

How do I do this, and also link it to the credit note since that is the “source” of the money?

This step is still unclear. Thanks for any help.