You need to capture all the credit notes you have manually issued for sales returns to your debtors (customers). The credit note transactions should cancel or reverse the transactions or a part of the invoice for which the credit note is issued.

You may enter the transactions of credit notes in the sales journal. The transactions are exactly the opposite to that of invoices entered in the sales journal.

- If you have a large number of credit notes to capture and process, you may create a Sales Returns Journal in the Setup→System Parameters→Batch Type menu option. This will enable you to generate a Batch Type Report for the credit notes entered into the Sales Returns Journal.

- If you trade in stock items, or you wish to generate Invoices in TurboCASH, you need to set up a service stock item, and enter your credit notes in the Input→Documents→Credit Notes menu option. By creating a Credit Note, TurboCASH will automatically write up your Sales Journal (Sales Returns Journal) for you.

This journal is used to record your credit notes or sales returns for the day. You would record the credit note number, date of the credit note, credit note details, the debtor (who you sold to), Output VAT/GST/Sales Tax (if you are registered for VAT/GST/Sales Tax) and the amount you charged the customer - including or excluding VAT/GST/Sales Tax, if you are registered for VAT/GST/Sales Tax and VAT/GST/Sales Tax is applicable to a transaction.

To Enter Sales Returns / Credit Note Transactions:

1. Click on the Batch Entry icon, or click on the Input→Batch Entry menu option.
   - Keyboard Access: Press the F2 key on your keyboard. Alternatively, press the Alt+I+B keys on your keyboard.
   The Batch Type Selection screen will be displayed.
2. Select the Sales Returns Journal or the Sales Journal.
3. Click on the Open button. The Batch Entry Transaction screen for the Sales Returns Journal or the Sales Journal is displayed:
   
   - If no contra account is displayed on the Batch Type Selection screen, you need to set the options for the batch. If you have not yet set the Sales Returns Journal (or the Sales Journal) batch for credit notes, or if your requirements should change, click on the F10: Setup icon, or press the F10 key on your keyboard.
   - Note that for Credit Notes, the Amount Entry field should be set to credit.
   
   - If you have a few credit notes, you may enter a negative (minus sign), followed by the amount in the debit column. These amounts will be transferred to the credit column.
   
   - If you have many credit notes to capture, you need to set the amount entry to credit in the setup options for the Sales Journal, before entering credit notes in the Sales Journal. Alternatively, you may enter the credit notes in the Sales Returns Journal.
4. Enter the following Credit Note in the Sales Returns Journal (or Sales Journal):
   
   Enter and / or select the following:
   1. Reference number - Enter the Credit Note number.
   2. Date - Enter or select the date of the transaction (i.e. Credit Note date).
   3. Description - Enter a brief description for the transaction.
   4. Account - Select the Debtor Account.
   5. Tax Account - Select the applicable Output Tax Account for the sales return transaction.
      - This is only applicable if Output VAT/GST/Sales Tax is allowed on a transaction, and if you are registered as a VAT/GST/Sales Tax Vendor. If no VAT/GST/Sales Tax is applicable to the transaction, select the No Tax code.
      
      - The same VAT/GST/Sales Tax Code as was selected on the original Invoice, should be selected for the Credit Note transaction, if applicable.
      
      - You may also select to hide the Tax column, and lookup facility in the Setup Options for the Sales Returns Journal (or Sales Journal), if no VAT/GST/Sales Tax is applicable to all transactions in this batch; or if you are not registered as a VAT/GST/Sales Tax Vendor.
      
   6. Amount - Enter the amount of the transaction (Inclusive or Exclusive of VAT/GST/Sales Tax) in the Credit amount column.
5. After entering the credit note in the Sales Journal, or the Sales Returns / Debtor Allowances Journal, the transactions will be displayed as follows:
   
   
6. Click on the F5: Balance icon, or press the F5 key on your keyboard, to balance the batch. The balancing transactions are displayed as follows:
   
   
7. TurboCASH will generate balancing entries to the sales account and the Output VAT/GST/Sales Tax account.
   - If the Consolidate Balancing option is selected in the Setup Options for this batch, the description for the balancing entries or transactions, will be displayed as “BALANCING ENTRY Sales Returns Jnl” or the name of your Returns Journal.
   
   - It is a good idea to over type this description, as it is not very meaningful to an outside auditor or accountant. If you over type these it will definitely make it easier to trace and reconcile transactions.
   
   
   
   • Over type the description with “Sales Returns - Credit Note CR001” in the description column.
   • Over type the VAT/GST/Sales Tax description with “Output VAT (GST/Sales Tax) - Credit Note CR001” in the description column.
   • Do not over type the eight asterisks in the reference column, as this indicates that these are contra transactions.
8. Click on the F9: Process icon, or press the F9 key on your keyboard, to change the alias (batch name).
   - This will help you if you wish to identify a specific batch to generate a batch type report, or if you wish to export posted batches to a file.
   
   
9. Click on the F8: List icon, or press the F8 key on your keyboard, to list the batch.
   - It is a good idea to list the batch, and check the entries on the batch thoroughly. If there are any errors, you may edit the batch, before posting the batch.
   
   
10. Click on the F6: Post icon, or press the F6 key on your keyboard, to post (update) the batch to the ledger.

After posting the transactions, the T-Account View of the transactions should reflect as follows:

1. Debtor’s Ledger:
   
   The full amount, including Output VAT/GST/Sales Tax, is credited to each individual Debtor’s Account in the Debtor’s Ledger.
   The total amount of the individual Debtor Accounts is also updated in the Debtor’s Control Account in the General Ledger.
   
2. General Ledger:
   
   
   The total amount, excluding Output VAT/GST/Sales Tax, is debited to the Sales Account.
   The total amount of the Output VAT/GST/Sales Tax is debited to the Output VAT (GST/Sales Tax) Account or Tax Code.

- Debits - Sales + Output VAT (GST/Sales Tax) = Credits - Debtors’ Ledger

- If the Consolidate Balancing option was not selected, when the options for this batch was set, the individual credit notes would have been listed or posted to the Sales and Output VAT/GST/Sales Tax account.

- It is not necessary to post (update) the transactions at the end of each day. You may add and / or post the transactions on a daily, or weekly basis, or at the end of a month. When you have entered a few transactions, you may close or exit the batch. The data will not be lost.

- Before you wish to post the batch, please ensure that you have checked the transactions, changed the alias, and printed a list of the entries in the batch.