Guidance Required – Tracking Purchase via Credit Note Separately in Purchase Register (ERPNext)

ERPNext
1

Hi Community,

We have implemented ERPNext for one of our clients and they are facing an issue related to the Purchase Credit Note process and reporting. We would appreciate your guidance on the correct approach or best practice.

Scenario:

To explain with an example:

  • Client places a Purchase Order for 10 items to a vendor

  • Supplier mistakenly sends 11 items, but raises the Purchase Invoice only for 10 items

  • All 11 items are:

    • Received in warehouse

    • Passed quality check

    • Consumed in operations

  • After a few days, the supplier realizes the excess supply and informs the client

  • Client agrees and wants to account for the extra 1 item by raising a Credit Note, thereby increasing the Accounts Payable balance for the vendor

Current Approach:

  • Client created the Credit Note using Journal Entry

Requirement:

They want to:

  1. Account for the extra purchased item correctly

  2. Track this transaction separately from the regular purchase cycle

  3. View it distinctly in the Purchase Register Report under Voucher Type, differentiating:

    • Normal purchases → PO → GRN → Purchase Invoice → Payment

    • Additional purchase → Credit Note / adjustment entry

Query:

What is the recommended process in ERPNext to achieve this?

  • Should this be done using Purchase Invoice Amendment / Debit Note / Credit Note instead of Journal Entry?

  • How can we ensure it appears separately in the Purchase Register by voucher type?

  • Any best practice or standard workflow for such scenarios?

Thanks in advance for your support!

2

1. First, clarify the accounting nature of this case

Although the supplier calls it a “credit note”, from the buyer’s perspective this is NOT a credit note.

This is an additional purchase liability for goods already:

  • Received

  • Accepted

  • Consumed

So accounting-wise, this is:

  • Additional Purchase Invoice / Debit to Purchase

  • Increase in Accounts Payable

Why Journal Entry is NOT recommended

Using a Journal Entry:

  • Breaks the purchase audit trail

  • Does not link to Item, Warehouse, or Stock Ledger

  • Will not reflect correctly in Purchase Register

  • Causes GST reconciliation issues

    Recommendation:

  1. Create Purchase Invoice

  2. Assign separate Naming Series : PINV-ADJ-.YYYY.-#### (Example)

  3. Supplier: Same vendor

  4. Item: Same item (1 qty)

  5. Rate: Same as original PO

  6. Post it on the date supplier confirmed excess supply

  7. Add remark:

    “Additional quantity supplied earlier but invoiced later – supplier adjustment”