Taking goods back and crediting a customer

Sometimes a sale has to be partly undone: goods come back, a delivery never arrives, or you agree to knock money off. There are three different tools for that, and picking the right one is most of the job.

Which one do you need?

The goods never reached the customer — the delivery is still on its way. Cancel the delivery. The stock comes straight back to your shelf and nothing was ever a cost.
The goods arrived and are coming back — the delivery is marked delivered. Raise a delivery return. The stock comes back and the cost is reversed.
The money needs adjusting — whether or not goods move. Raise a credit note against the invoice.

Returning goods and crediting money are separate. A customer who returns goods usually needs both — the return puts the stock back, the credit note stops them owing you for it.

Bring goods back

Open the delivery note.
If it shows Confirmed and has not arrived, click Cancel Order on it. The whole delivery is reversed.
If it shows Delivered, click Generate Delivery Return instead.
Tick the lines coming back and set the quantity for each — a part return is normal.
For tracked goods, choose which batches or serial numbers are being returned.
Confirm. The stock is back and available to sell.

The button on a delivery changes its own label depending on the state, so you do not have to remember which case you are in — but the effect on your accounts is different, which is why it is worth knowing.

Credit the money back

Open the confirmed invoice.
Click Generate Credit Note.
Tick the lines being credited and set the amounts.
Decide whether this credit note moves stock, using the toggle in the window. See below.
Confirm. The credit note is created and recorded.
Match it against the invoice from the credit note's offset screen, so the customer's balance is right.

The stock toggle on a credit note

This is the setting people get wrong, so it is worth being clear.

On — the goods come back into stock as part of the credit, valued at what they originally cost you. Use it when you are crediting a physical return that has not already been handled by a delivery return.
Off — nothing moves in stock; it is purely money. Use it for a discount, a goodwill gesture, or an overcharge.

Do not put the same goods back twice. If you have already raised a delivery return for them, the credit note must have the stock toggle OFF — otherwise your stock figures count them back in twice and your cost of sales is wrong.

With the toggle on, goods you track by batch or serial number need you to say which ones are coming back.

On the buying side

The same shape works when you are the one returning something. Open the supplier bill and click Generate Credit Note to raise a supplier credit note, with the same stock toggle and the same rule about not double-counting. One difference: if the bill was never matched to a goods receipt, the toggle is forced off, because there is no receipt to take the goods back out of.

What can stop you

If Generate Credit Note is missing, the invoice is still a draft, or it has already been credited in full.
If a return will not accept your quantity, more than that has already come back, or part of it has been invoiced. What is returnable is what was delivered, less what has come back already.
If the stock toggle is greyed out on a supplier credit note, the bill is not matched to a goods receipt.
If confirming complains about batches, a tracked line needs you to choose which specific goods are coming back.
If the whole thing is refused because of the date, it falls in a closed month or a filed tax period. See Financial Periods.