Debit Notes
Reduces what you owe a vendor. DR AP, CR Purchases + Tax.
A debit note reduces the amount you owe a vendor. It is the purchase-side equivalent of a credit note on the sales side. When a debit note is saved, accounts payable is reduced and the original purchases (or expense) account and purchase tax are credited — effectively reversing part or all of the original bill.
Use Cases
| Use Case | Who | Why |
|---|---|---|
| Return goods to vendor | Procurement / Accountant | Goods damaged or incorrect — return them and reduce what you owe |
| Vendor overcharged | Accountant | Bill amount is higher than agreed — claim the difference back from the vendor |
| Vendor credit received | Accountant | Vendor issues a credit note — record the corresponding reduction in your AP |
| Price adjustment after posting | Accountant | Negotiate a lower price after a bill was already saved |
| Quality deduction | Procurement | Accept substandard goods at a reduced price — document the agreed reduction |
Creating a Debit Note
Standard path — from a Bill:
Open the bill detail page → Lifecycle panel → Returns → Create debit note. The debit note is pre-populated with the bill's vendor and items. Remove the lines that are not affected and adjust quantities and rates to reflect only what is being returned or reduced.
Standalone path:
Procurement → Bills → Debit Notes tab → New. Use when the debit note is not tied to one bill.
Fields
| Field | Required? | Details |
|---|---|---|
| Vendor | Yes | Pre-populated from the source bill. Required on standalone. |
| Date | Yes | Date the debit note is raised — the accounting date. |
| PO Number | No | Optional reference. |
| Items | Yes | Items being returned or adjusted. Same table as the bill: Item, Qty, Rate, Discount, Tax, Amount. |
| Optional fields | No | Subject, Center/Location, Project, Tags, Note, Attachments — from the Fields menu. |
Save posts the debit note (status Issued); Save as Draft keeps it unposted.
Journal Entries {#journal}
The debit note reverses the financial effect of the original bill. The AP obligation is reduced, and the cost and tax accounts are credited.
| Account | Debit | Credit | Description |
|---|---|---|---|
| Accounts Payable | 5,375.00 | — | AP obligation reduced by the full amount including tax |
| Purchases / expense account | — | 5,000.00 | Original cost reversed — uses the item's expense account when one is set |
| Purchases tax | — | 375.00 | Recoverable tax reversed proportionally |
If the original bill carried a document-level discount, the reversal also debits Discount Received for the discount share.
Inventory Returns {#inventory}
For stock items, the debit note lines reduce stock on hand by the returned quantity. The ledger entry is the same shape as above — the credit goes to the account the item posts to.
| Account | Debit | Credit | Description |
|---|---|---|---|
| Accounts Payable | 3,225.00 | — | AP reduced by full value including tax |
| Purchases / inventory account | — | 3,000.00 | Value removed — quantity leaves stock on hand |
| Purchases tax | — | 225.00 | Tax originally recorded is reversed |
Debit Note Status Reference
| Status | Meaning |
|---|---|
| Draft | Work in progress. No financial impact. Fully editable. |
| Issued | Saved and posted. AP reduced. Cost and tax reversed. Stock adjusted for stock items. |
| Voided | Reversed. Original AP reduction undone. Document remains in audit trail. |
When a vendor issues you a credit note, create a debit note in Trabalance to match it. If the vendor will refund cash instead of crediting future bills, convert the debit note with More → Convert to → Vendor Refund — see Vendor Refunds.
Related
- Getting the money back rather than crediting it: Vendor refunds.
- The bill the note reduces: Bills.
- When to write off instead of raising a note: Writing off a bill.
- Where returns appear on the chain: Tracking a bill — the Lifecycle panel.