The credit note is not in the aging report

You raised a credit note for a customer last week. You are looking at the aging report now, and the invoice is still there at its full value, in the same bucket, as though nothing happened.

The credit note exists. It is almost certainly correct. What has probably not happened is the second half of the job — raising a credit note and applying it are two separate acts, and only the second one changes an invoice.

Ten minutes here and you will be able to look at any credit note and say, in three numbers, whether it has been applied, how much of it is left, and which report will and will not show it.

Meet GadgetSphere

GadgetSphere Sdn Bhd sells consumer electronics through 22 branches and bills corporate clients through a separate distribution company. A corporate client is invoiced RM 18,400 for a batch of ultraportable laptops, two come back faulty, and a credit note goes out for RM 2,300. That is the running example below, and it is the ordinary shape of this question.

The 30-second check

Open the credit note itself and read its own balance.

Every AR document — invoice, cash bill, credit note — carries three numbers of its own, and they are the source of everything every debtor report shows you:

Read the Contra figure on your RM 2,300 credit note.

• Contra is zero, Balance is RM 2,300. The credit note has never been applied to anything. That is your answer, and Apply it to the invoice below is the fix.
• Contra is RM 2,300, Balance is zero. It has been fully applied, and it is missing from the report because an outstanding listing shows documents with something left on them. That is correct behaviour, and Where an applied credit note does appear tells you where to look instead.
• Contra is somewhere in between. Part of it has been applied. Both of the above apply, to their halves.

That one number settles four of the five cases on this page.

Raising is not applying, and this is the one to understand

A credit note is not an adjustment to an invoice. It is its own document, with its own number, its own posting, and its own balance on the customer’s account. Raising one puts RM 2,300 of credit against the customer. It does not decide which of that customer’s invoices the credit belongs to, because BigLedger does not guess.

Applying it — the contra — is the separate act that says this credit goes against that invoice. Doing it writes a mirrored pair of links: the credit note’s Contra moves by RM 2,300 and the invoice’s Contra moves by RM 2,300 in the opposite direction, so both balances fall at the same instant.

Until you do that, your books are still right and your report is still honest:

• The customer’s total is right — RM 18,400 owed less RM 2,300 credit, because the report adds up both documents.
• The invoice line shows RM 18,400 outstanding, because RM 18,400 is genuinely still outstanding on that invoice.
• The credit note line shows RM 2,300 unapplied, usually near the top, and it is very easy to scroll past.

So the complaint is usually not that the credit note is missing. It is on its own line, and it was being looked for inside the invoice.

Apply it to the invoice

Open the credit note › the Contra tab › select the invoice › apply

You can work from either end — the credit note’s Contra tab or the invoice’s — and you can also apply from the Debtor Report. Apply RM 2,300 of the credit note against the invoice. Both balances fall together: the credit note goes to zero, the invoice goes to RM 16,100, and the aging report shows RM 16,100 in the invoice’s own bucket from the next time it is read.

Partial credits are ordinary. Apply RM 2,300 of a RM 5,000 credit note and RM 2,700 stays on the credit note, available for the next invoice.

Where an applied credit note does appear

Once a credit note has been fully applied it has nothing left on it, and an outstanding listing is a list of documents with something left. The outstanding listings on the Debtor and Creditor reports all end with the same condition — show me documents whose balance is not zero — so a fully applied credit note is excluded by construction, not by accident.

Three places to look for it instead:

• The invoice’s own Contra tab. Every document that settled this invoice is listed there, receipts and credit notes together, with amounts and dates. This is the definitive answer to “what happened to this invoice”.
• Switch the outstanding filter. The listings also offer the opposite view — documents with a zero balance — which is where a fully settled credit note lives.
• Collection Invoice with Aging, on the Debtor Report. This screen is built from the settlement links themselves rather than from documents, so it pairs each invoice and cash bill with what settled it, in red. It is the one screen that proves a credit note was applied — and it is worth knowing its exact scope, because nothing on it says so: it shows receipts and credit notes only. A sales return that settled an invoice will not appear on it, even though it settled the invoice perfectly well. For a return, use the invoice’s own Contra tab.

Five reasons, in the order worth checking

1. It was raised but never applied. The 30-second check above settles it, which is why it is first.

2. It was applied, so it has no balance and the outstanding listing correctly omits it. Also above.

3. It is still a draft. Every debtor and creditor report reads only documents that are final. A credit note that was saved and not finalised is invisible to every report in the applet, and it has posted nothing — no journal, no effect on any balance. Open it and check its posting status before looking anywhere else.

4. You are reading a snapshot rather than the live position. Several of the aging views are built from a stored photograph taken at a point in time, not recomputed as you look. A credit note applied after the photograph was taken will not be in it, and the document itself will disagree with the report. That is a whole page of its own: The aging still shows an invoice that’s already paid.

5. You are on the creditor side. Credit note and creditor are two different words that share their first six letters, and a search for one reliably finds the other. A sales credit note — money you owe a customer — belongs to the Debtor reports. A purchase credit note from a supplier belongs to the Creditor reports. If your credit note is nowhere on the aging report you are reading, check which of the two reports you have open before anything else.

The setting that can hide document types, and what it can and cannot hide

The Debtor Report applet has a settings entry called Document Types to Exclude. It is a multi-select, its value is applied to six separate debtor listings, and nothing on the report itself tells you a document type has been removed. It is worth knowing about, because a report quietly missing a whole category of document is the kind of thing that costs an afternoon.

It cannot be what is hiding your credit note. The list offers exactly ten choices and every one of them is a purchase document type — supplier invoices, purchase returns, goods received and issued notes, and the consignment purchase documents. No sales document type is offered at all, so no setting on that screen can remove a sales credit note from a debtor report.

It is worth checking anyway if what is missing is a supplier document from a trading partner who is also a customer, which is the arrangement where a purchase document can legitimately appear on the debtor side.

What you can and cannot undo

• Applying a credit note can be undone. Remove the contra and both balances return to what they were. The link is marked as removed rather than erased, so the history stays readable.
• Finalising a credit note cannot. It has posted. The way back is a debit note or a void, and a void is visible for ever.
• A credit note applied to the wrong invoice is a two-step correction: remove the contra, apply it to the right one. Nothing is lost, and both movements stay in the record.
• Nothing on this page needs a journal entry. If somebody is proposing to fix an aging report by posting a manual journal to the receivables control account, stop — a journal posted straight at that account appears in the ledger and can never appear in the aging, because the aging is built from documents and their links. You will have made the two disagree permanently.

What success looks like

Thirty seconds, on the customer you are arguing about:

1. Open the customer on the Debtor Report. Their total is what you believe they owe.
2. Open the invoice and read its Contra tab. The credit note is listed, with its amount and date.
3. Open the credit note and read its Balance. Zero if you meant to use all of it, or the remainder if you did not — and that remainder is deliberate rather than forgotten.

If all three hold, the aging report is telling the truth and so is everything downstream of it.

Common mistakes

Related documentation