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            Create a Credit Note and Apply Tax

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            Create a Credit Note and Apply Tax

            Create a credit note record and several credit note lines, then apply tax to the credit note. After applying tax, you can allocate your credit note lines to change the balance of an invoice line. (Salesforce Billing Managed Package)

            Required Editions

            Available in: Salesforce Billing Winter ’18 and later

            Usually, Salesforce Billing automates credit note creation when you provide a refund or rebill an invoice. However, you may sometimes need to create a credit note record on your own. In this scenario, you’ll create a credit note, associate it with an account, then create several credit note lines. You can then make a call to your tax engine and apply tax to each of your credit note lines.

            1. Go to the Credit Notes tab and click New, or click New Credit Note in your account’s Credit Notes related list.
              Note
              Note Salesforce Billing doesn’t support creating credit notes from the invoice’s Credit Notes related list.
            2. If your credit note doesn’t have a value in the Account field, choose an account for your credit note. You can apply the credit note to any invoice lines on that account.
            3. Set the Credit Note Source Action field to Manual.
              The source action allows other users to review how the credit note was created.
            4. Provide a credit note date.
              Salesforce Billing records credit note transactions in the finance period that covers the credit note’s date.
            5. Provide an effective tax date.
              Salesforce Billing sends this date to your tax engine during tax calculation. If you’re manually applying tax to your credit note, this is a required field.
            6. Fill out the tax address fields.
              Salesforce Billing sends this address to your tax engine during tax calculation. If you’re manually applying tax to your credit note, these are required fields.
            7. Click Save.
            8. From your credit note record, click New Credit Note Line.
            9. Enter a product lookup in the Product field.
              The product lookup field is for reference purposes. The relationship is important for reporting on transaction history in the general ledger. This product doesn’t have to be the product related to the invoice line you want to apply your credit note toward. For example, if your credit note allocates $50 to a customer’s invoice based on store credit, the Product field should look up to the Store Credit product record.
            10. If your implementation uses legal entities, enter a legal entity.
            11. Give your credit note line a value for the subtotal field
              This value represents the total amount available for allocation on this credit note line. It does not include tax. When you apply tax, Salesforce Billing calculates tax for each credit note line, adds it to the line’s subtotal, and shows the results in the line’s Total Amount (With Tax) field.
            12. If you want Salesforce Billing to calculate tax for this credit note line, select Calculate Tax?
            13. Change the value of the Tax field from 0 to null.
            14. Save your credit note line.
            15. Create more credit note lines if needed.
            16. You can now either estimate tax or apply tax.
              1. To estimate tax, click Estimate Tax on your credit note.
                Salesforce Billing updates the Tax field and the Total Amount (With Tax) field on each of your credit note lines. You can click Estimate Tax again to receive a new estimation.
              2. When you’re ready to apply tax, click Apply Tax on your credit note.
                Salesforce Billing updates the Tax field and the Total Amount (with Tax) field on each of your credit note lines. If your credit note is a draft, Salesforce Billing also posts it.
                Note
                Note If you're using the standard tax engine, always use Apply Tax button to post the credit note. This ensures accurate tax calculations in Tax and Total Amount (with Tax) fields. Manually changing the credit note status from draft to posted affects tax calculations.
            17. After applying tax, click Allocate on your credit note to allocate your note to your desired invoice lines.

            The creation of a credit note line represents the following journal entry.

            Create Credit

            • Debit Net Sales
            • Debit Tax Payable
            • Create Credit on Account (COA)

            Allocating a credit note line to an invoice line represents the following journal entry.

            Allocate Credit Note

            • Debit COA
            • Credit A/R

            See Also

             
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