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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.

Credit note document is prepared by the supplier on receiving the goods return By the customers/debtors.

Credit note is a debit of the creditor’s account and a credit on the purchase returns account. If the buyer has not yet issued payment for the original invoice, the credit note reduces the liability. It means that the liability of the money that they owe the seller is reduced.

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

This usually happens when:

  • A customer returns goods.
  • A business offers a price adjustment or discount after the sale.
  • Tax adjustments or refunds are made.

 

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.

Practice Assignments

Here are five practice exercises to help you master Credit Note Vouchers in TallyPrime:

  1. Goods Return (Single Item):
    A customer returns 3 units of a product worth ₹300 each due to defects. Record this transaction.
  2. Discount Adjustment:
    Your business offers a ₹2,000 discount to a customer for a bulk purchase as a post-sale adjustment.
  3. Tax Adjustment:
    A customer was charged extra tax of ₹500 by mistake. Record a credit note for the excess tax.
  4. Partial Return:
    A customer returns 2 out of 5 items purchased. Each item is worth ₹1,200.
  5. Full Order Cancellation:
    Record a credit note for ₹10,000 when a customer cancels their entire order after payment.

Tips for Using Credit Note Voucher

  • Always verify the reason for issuing a credit note to ensure accuracy.
  • Use clear narrations to describe the transaction.
  • Make sure the customer’s account is correctly updated after saving the voucher.

By practicing these assignments, you will develop confidence in handling Credit Note Vouchers in TallyPrime.

 

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