Using Debit Note As a Form of Payment?

I have a scenario which is probably typical and yet I cannot seem to figure out how to use ERPNext for a simple transaction.

We purchased some goods from a vendor for $1000. We then returned the goods and issued them a Debit Note. Then we later purchased some other goods for $1500 which they invoiced us for $1500. I want to use the debit note ($1000) to only pay them the difference of $500.

I created the Purchase Invoice for the $1500 and assumed I could go to “ADVANCED PAYMENTS” and find the $1000 debit note balance there. This is not the case. My question is how can I use the debit note to offset the amount I am paying them on the future invoices? I cannot find this scenario anywhere in the manuals nor the group discussions. How do other people apply debit notes against future invoices with ERPNext?

Any help is greatly appreciated!

Not sure about the implementation in ERPNext but debit note does not consitute any title of payment - debit note needs to be followed by a credit note from a supplier. A credit note can be usually matched with an open bill. In your case it would be the 1500 bill, applying a credit note would leave it at 500 due.

Hope it helps.

Perhaps confirm this expected behaviour Debit Note re the accounts affected and reports, as they relate to your case?

you can use the payment reconciliation for this. But not on the advanced payment.

Hi I did the instruction on this manual here on how to process a debit note.

It says to create the following: (This is for a scenario that I purchase something then decided to return/cancel the purchase)

  1. Create Purchase Invoice
  2. Create payment entry for the above Purchase Invoice.
  3. Create Debit Note to record a canceled paid purchase invoice. (and to be submitted to the supplier to bill them)
  4. Create payment entry (as received type) on the original invoice.

So I smoothly did the steps. However, upon checking the debit note was floating as an open payment which should not because I already received the returned payment from the supplier and I will not use the debit note to other next invoice since the payment was returned to me.

How can I close the debit note? I am not sure if I did sometimes wrong?