Your supplier has retroactively reduced the price of goods that are already in stock (and often already sold), or you need to correct a selling price for a customer without the goods being returned. In both cases you need a so-called financial credit note: a corrective tax document that changes only the price, not the quantity.
This guide describes how to create such a credit note in ABRA Flexi from the original invoice so that the link to the original document is preserved, no stock movement is created, and only the credited difference is reflected in accounting and VAT.
ℹ️ The principle in brief: you create the credit note from the original invoice, but with a document type that does not generate a stock document. For a received credit note, you then also reduce the valuation of the original goods receipt so that it matches the new purchase price.
Financial or stock credit note?
The deciding factor is whether the goods are physically returned. Choose the credit note type accordingly:
Situation | Credit note type | What is created in stock |
You are returning goods to the supplier | Stock (stock generation enabled) | Goods issue for the returned quantity |
The supplier is correcting only the price | Financial (stock generation disabled) | Nothing; you adjust the goods receipt valuation by allocating costs |
A customer is returning goods to you | Stock (stock generation enabled) | Goods receipt for the returned quantity |
You are correcting only the selling price for a customer | Financial (stock generation disabled) | Nothing |
⚠️ Do not use a stock credit note to correct a price. It creates a stock movement that does not reflect reality, and if the goods have been issued in the meantime, it may result in an error or negative stock. Such a credit note also cannot be easily deleted later because of links to subsequent issues, as described in the article on why an incorrectly created document cannot be deleted.
Setting up the credit note type
For financial credit notes, prepare a separate document type: one in the received invoice types and one in the issued invoice types. The easiest way is to copy an existing credit note type, as shown in the guide to document types, and modify the following in it:
Name: for example "Financial corrective tax document", so you can easily recognize the type in the list,
Kind: Credit note/corrective tax doc.,
Generate stock: disabled.
You can find the Generate stock option under More options on the Stock tab.
ℹ️ In the desktop application, the same option is called Automatically generate stock documents and require entry of serial numbers, and you can find it on the Invoice tab in the document type. For details, see the article on automatic creation of stock documents.
⚠️ Choose the correct type when you create the credit note. Stock generation cannot be disabled afterwards on a saved document; an incorrectly created stock credit note must be deleted and created again.
📋 For the new type, also check the other settings, especially the posting rule and the document series, so that the credit note is posted in the same way as your regular credit notes. We recommend consulting your accountant about the posting rule settings.
Received credit note from a supplier
Use this procedure when the supplier is crediting a price difference and the quantity of goods remains the same.
Step 1: Create the credit note from the invoice
Open the original received invoice.
In the … menu (More functions) next to the Close button, select Create credit note.
In the Credit note window, select a Credit note type with stock generation disabled and fill in Received number (the credit note number from the supplier) and Due date; the window marks them as required fields.
Check the items affected by the price correction and leave a minimal quantity in the Credit column for them, e.g. 1. Confirm with the Create button.
On the resulting credit note, adjust the item prices so that the document contains only the credited difference, and save the document.
Choose the quantity and price on the credit note line so that their product equals the credited difference. You can keep 1 unit with the whole difference amount, or keep the original quantity with the price difference per unit. The second option is clearer if the supplier states the difference per unit.
Step 2: Check the links
After saving, open the links of the credit note (in the … menu, select Show links). No stock document may be created for it; in the links you will see only the original invoice and the goods receipt that was created with it.
The credit note thus corrects the payable to the supplier and VAT, but does not change the stock quantity.
Step 3: Reduce the goods receipt valuation
The credit note corrects the purchase price of the goods, so you also need to reduce the valuation of the original goods receipt. To do so, use the allocation of incidental costs to stock function, in which you enter the credited amount as a negative value.
Open the original goods receipt that was created with the received invoice.
In the … menu (More functions), select Allocate incidental costs to stock.
In the Costs to allocate field, enter the credited amount with a minus sign, e.g.
-75.Choose the cost allocation method, by price or by number of pieces, and confirm with the Allocate button.
The reduced price is reflected in the goods receipt and in the stock card, and the stock recalculation also spreads it to the subsequent goods issues from which the goods have been sold in the meantime.
💡 The stock recalculation starts automatically after the receipt price is changed. If the valuation of the goods issues is not correct, run the stock recalculation manually. The same mechanism with a negative amount is also described in the guide to a fixed-amount discount.
⚠️ Allocation works with the entire goods receipt. It distributes the amount proportionally across all of its items, by price or by number of pieces. You cannot enter an absolute amount for a specific line. If the supplier corrected the price for only some items, or by a different amount for each, the valuation of individual items will not be exact, although the total value of the receipt will match. In that case, contact us and we will help you find a suitable solution.
Example
The received invoice contained two stock items with a total value of CZK 150 excl. VAT (10 cups at CZK 5 and 5 jugs at CZK 20). The supplier then reduced their price as follows:
Item | Credited difference |
Item A (cups) | CZK 25 |
Item B (jugs) | CZK 50 |
Total | CZK 75 |
Result:
the credit note contains items with a total value of -CZK 75 excl. VAT and corrects the payable and VAT,
an incidental cost of -CZK 75 is allocated to the goods receipt, and its value drops from CZK 150 to CZK 75 (with allocation by price, a cup drops from CZK 5 to CZK 2.50 and a jug from CZK 20 to CZK 10 per piece),
after the recalculation, the new price is also reflected in the subsequent goods issue,
the stock quantity does not change and the credit note creates no stock movement.
Issued credit note to a customer
Use the same principle when you are correcting only the selling price for a customer and the goods are not returned to stock. In the issued invoice types, prepare a credit note type with the same settings as for the received credit note.
Open the original issued invoice.
In the … menu (More functions), select Create credit note.
Select an issued credit note type with stock generation disabled.
Mark the items affected by the price correction.
Adjust the item values so that the credit note reflects only the difference in the selling price.
Save the document and check in the links that no stock movement was created.
The credit note reduces revenue and VAT; the stock quantity remains unchanged.
ℹ️ For an issued credit note, the stock valuation is not adjusted. The selling price changes, not the purchase price of the inventory, so you do not use the allocation of incidental costs here.
Alternative: manual credit note without stock items
A financial credit note can also be created manually, without a link to the invoice and with items entered as text only. This is especially useful for issued credit notes, when you do not want the printed credit note to show the customer a negative quantity of goods that are not actually being returned.
Create a new credit note with a type that does not generate stock.
Enter items without a price list code; fill in the name, quantity, and price directly. An item without a link to the price list does not create a stock document.
Save the document.
Link the original invoice to the credit note afterwards, as described in the guide to creating a credit note manually.
📝 For received credit notes, we recommend the procedure from the original invoice. The link is created right away and the items match the original document, which makes it easier to trace which goods the price correction relates to.
FAQ
Why can't I enter the original item as negative and the corrected one as positive on the credit note?
When a credit note is created, it automatically flips the sign of the quantity to negative, and you cannot enter a positive quantity on it. You can achieve the same result more simply by entering just the price difference.
I accidentally created a credit note that generated stock. What should I do?
Stock generation cannot be disabled on a saved document; the credit note must be deleted and created again with a financial type. If deletion is blocked by links to subsequent issues or payments, follow the article on why an incorrectly created credit note cannot be deleted. If you are unable to trace the links, please contact us.
Can I create a negative goods receipt for the difference instead of using allocation?
We do not recommend it. A manual negative goods receipt changes the quantity in stock and disrupts the links between movements; this is explained in more detail in the article Negative goods receipts and why not to use them.
The supplier corrected the price for only one item on the invoice. How should I proceed?
Create the credit note in the same way and select only the affected item. However, the allocation of incidental costs distributes the amount proportionally across all items on the goods receipt, so the valuation of individual items will not be exact. If an exact valuation of a specific item is important to you, please contact us.
Can I correct the price directly on the original received invoice instead of using allocation?
Not for a financial credit note. Correcting the price on the invoice also changes its amount in accounting and VAT, so both the payable and VAT would be reduced twice: once by the invoice correction and again by the credit note. The invoice would also no longer match the supplier's document.
Correct the price on a received invoice line only if it was recorded incorrectly and the supplier did not issue any corrective document. The price change is also reflected in the linked goods receipt, and the valuation of subsequent goods issues is aligned by the stock recalculation. If the valuation on the stock card is still not correct after that, diagnostics of incorrect stock prices will help.
Do I need to adjust the stock valuation for an issued credit note?
No. An issued financial credit note changes only the selling price; the purchase price of the inventory stays the same.
💡 Not sure how to set up financial credit notes in your account, or need to adjust your posting rules? Write to us at podporaflexi@abra.eu and we will be happy to help.