How to mark both a sales invoice and credit note as settled in FreeAgent.
If you issue a credit note to your customer so that they don’t have to pay all or part of an invoice you’ve already sent them, you’ll want to show both the invoice and the credit note as settled in FreeAgent.
But there’s no “netting off” mechanism as such.
Receipt and payment
Instead, you need to enter a dummy receipt against the invoice and a dummy payment against the credit note.
Here’s how to do that.
On this list, you can see an invoice and a credit note for the same amount. The credit note cancels out the invoice.
1. Receipt for invoice
Select on the invoice to go to it...
...and then select the Add a Manual Payment button.
Enter a manual invoice receipt, settling the invoice in full, as at the credit note’s date, because this is likely to be the date on which you want the net off to show.
Create this entry.
2. Payment for credit note
Then do the same for the credit note, making sure the type is now set as Credit Note Refund instead of Invoice Receipt. You’ll find this under Money Out.
Create this entry.
Once you’ve done this, both the invoice and the credit note will show as settled, the invoice as paid and the credit note as refunded, on the Invoices screen.
...and bank account balancing
And if you then go to the Banking screen and select on your primary account, you’ll see a receipt and a payment for the same amount, cancelling each other out.
That’s it. Job done.
What if the credit note doesn't cancel out the whole invoice?
If the credit note only settles part of the invoice, then follow the same steps, but when you enter the invoice receipt, only enter the amount that’s covered by the credit note. This is so that the receipt and payment in the bank account are the same, and so that the amount of the invoice that isn’t covered by the credit note still shows as due.