What are Credit Notes?
A credit note (also known as credit memo) is issued to indicate a return of funds in the event of an invoice error, incorrect or damaged products, purchase cancellation or otherwise specified circumstance.
Typically, within an Accounting Software, a credit note is another type of document, just like an invoice or a sales order.
How are Credit Notes used?
When a payment is being made by your customer, if there are credit notes available, they may choose to apply the total or partial amount available in the credit notes against the total amount payable.
For example, if the total amount payable is $1,000 and the total credits available is $500 across 2 credit notes, when your customer decides to apply the entire amount available as credits against the payment of $1,000, the net amount payable using other means (credit card / bank transfer) would be $500. Once the payment is complete, the pending credit notes amount will be zero.
In another scenario, say the total amount payable is $500 and there is one credit note available for $700, then the entire amount can be paid using that credit note. After payment, there will be a balance of $200 available in the credit note.
How does this work in Simplypaid?
Step 1:
The total amount will be displayed above the payment methods.
Clicking the blue hyperlink will show the list containing the document number, issue date and the amount of each credit note. In the example below, there are 4 credit notes totalling $2,865.00.
Step 2:
To use the credits, your customer must select the checkbox. Once it is done, the net amount payable will be updated considering the invoice(s) selected and the credits to be applied.
Note:
When multiple invoices are selected, the system will allocate the credits against the higher invoice. This process is applied repeatedly until there is either no more credit balance available, or there is no more pending payment balance, or both.
If there are invoices with the same value, the credits will be applied to the oldest invoice first.
If the credits available are enough to fully pay the invoice(s) selected, only the card “Credit Notes” will be displayed.
The credit balance is updated accordingly for future payments.
Step 3:
To ensure security, in order for credit notes to be applied, an One-Time-Password (OTP) will be sent to an email address previously registered in ezyCollect.
Your customer must firstly inform the email which will be validated in our database.
The OTP is then generated and sent to that email address.
Upon informing of the correct OTP, only then will the user be able to "Apply and Proceed" with payment.
Step 4:
After clicking “Apply and Proceed” if there is still an outstanding balance, the system will redirect your customer to the payment method screen they have selected at the beginning of the process to complete payment for the remaining balance.
Otherwise the receipt is displayed.
Note: If your Customer opts to apply credit notes and pay the outstanding balance with a credit card (or any other payment method available), this will be executed in two different transactions. Therefore, if the payment with the credit card fails, the credit note applied is kept.
To get started: Simply email us at customersuccess@ezycollect.com.au to implement this premium feature for a fee.