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Credit Note Voucher in TallyPrime – Sales Cycle / Proccess

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A Credit Note Voucher is used to record transactions where a business gives credit to a customer, which helps record returns or adjustments when goods are returned by customers, discounts are given, or any other credit adjustment is required.
In TallyPrime, Credit Notes help record sales returns or adjustments in receivables from customers. Credit note document is prepared by the supplier on receiving the goods return By the customers/debtors.

It directly has a negative effect on the sellers accounting balance. The credit note informs clients about the credit provided in their account.

 

🧾 Common Situations for Issuing a Credit Note:
Scenario Example
Sales return Customer returns damaged goods worth ₹10,000
Overbilling Customer was billed ₹12,000 instead of ₹10,000
Post-sale discount ₹500 discount issued for bulk purchase

credit note

 

How to record Credit Note in TallyPrime

Step 1 Click on vouchers

 

Step 2 Click on Other vouchers

 

Step 3 Click on Credit Note (ALT + F6)

If this voucher not showing in Tally Prime then you can press on show Inactive

 

  1. Enter the following details:

    • Party’s Name: Select the customer or party to whom the credit applies.
    • Items or Ledger: Add the returned items or ledger for which the credit is being issued.
    • Amount: Enter the total credit amount.
    • Narration: Add a note explaining the reason for the credit.

 

1.  Following item retuned to Ghansyam IT Hub

 

2.  Following item retuned to Dubay Mobile Marketing

 

3. Following item retuned to Adarsh A to Z Mobile Hub

 

Example of a Credit Note Voucher

Scenario:

Your business, ABC Traders, sold 10 items to a customer, but 2 items worth ₹500 each were returned due to damage.

Here’s how you can record this:

  1. Open Credit Note Voucher.
  2. Select the customer’s account (e.g., Customer A).
  3. Under Items, add the product being returned. Enter the quantity (2) and the value (₹500 each).
  4. The total credit amount will automatically calculate as ₹1,000.
  5. In the Narration, write: “Goods returned due to damage (Invoice #456).”
  6. Save the entry.

Now the customer’s account is credited with ₹1,000, and your records are updated.

 

🧾 Credit Note vs Debit Note

Basis Credit Note Debit Note
Issued By Seller Buyer
Used For Sales return or price reduction Purchase return or price reduction
Account Affected Customer account is credited Supplier account is debited
🧾 Example Entries for Credit Notes

1. Sales Return with GST

Dr. Sales Return A/c ₹10,000
Dr. CGST Output A/c ₹900
Dr. SGST Output A/c ₹900
Cr. Customer A/c ₹11,800
Narration: Being return of goods by customer with GST adjustment.

2. Overcharged Invoice Adjustment

Dr. Sales A/c ₹1,695
Dr. CGST Output A/c ₹152.50
Dr. SGST Output A/c ₹152.50
Cr. Customer A/c ₹2,000
Narration: Being credit note issued for overcharged invoice #202.

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