How to Create a Credit Note

Credit notes reduce the amount owed to a supplier or contractor, for example, when a supplier issues a credit for returned materials or an overbilled amount. In JACK, you create credit notes from Finance > Bills or from within a job at Jobs > Job Financials > Bills using the standard bill workflow, keeping your job budgets accurate.

To create a credit note, navigate to Finance > Bills and click in the top right, or navigate to Jobs > select the relevant Job > Job Financials > Bills and click .

Complete the bill details as you would for a standard bill. Select the Job the credit note relates to, then select the Supplier, and enter the Reference, Invoice Date and Due Date. Set the Tax Rate and select the appropriate Account. Make sure Sync to Xero or Sync to QuickBooks is ticked so the credit note syncs to your accounting software.

Click Edit line items, then click Add Item to add a line. Enter a Description, a negative quantity in the Qty field (e.g. -1), and the value in the Unit Price field. The Amount shows as a negative, reflecting the credit. Repeat for any other items, then click Save and Close.

To link the credit note to the job budget, click Link Bill to Job Costings. Under Select Bill Items, click + next to each item you want to link, or click + at the top of the column to select them all. Then, under Link Budget Item, select the costing item to assign them to. Click Save and Close.

Once you save the credit note, it moves to the Credit Notes tab automatically, and a CREDIT NOTE badge shows at the top of its Details.

In Finance > Bills, it’s listed under the Credit Notes tab, showing the negative amount alongside the supplier name, reference and linked job.

Within the relevant job, navigate to Jobs > select the relevant Job > Job Financials > Bills. The credit note appears in the bills list with a status of CREDIT NOTE and a negative amount, reflecting the reduction against the job budget.

Before the credit note can be synced, it must be set to Approved for Payment. Depending on your business’s bill approval process, this may be done immediately using the Approve button, or routed for review using Needs Approval. For more on approvals, see Bill Approvals.

Once approved, click Sync with Xero or Sync with QuickBooks in the top right. This opens the sync drawer, where the credit note is listed with a New tag. Click Sync with Xero or Sync with QuickBooks in the drawer to send it to your accounting software.

When the credit note syncs, it arrives in Xero as a draft bill. In Xero, navigate to Purchases > Bills and select the Draft tab. The credit note appears with a Draft status, and the amount is shown in brackets (e.g., (500.00)) to indicate it’s a credit.

The reference in Xero is made up of the reference you entered in JACK, followed by the JACK bill and job numbers, so it’s easy to match back. Click the credit note to open it. It opens as a draft credit note, and History & Notes shows it was received from JACK App.

From here, reconcile the credit note in Xero as usual. In JACK, the only change is that the credit note status moves to SYNCED. Once the credit note is paid in Xero and synced back to JACK, the payment shows under Payments, and the status changes to PAID.

When the credit note syncs, it arrives in QuickBooks as a Supplier Credit. In QuickBooks, navigate to Expenses & Bills > Expense transactions. The credit note appears as a Supplier Credit, and the amount is shown as negative (e.g., -A$500.01) to indicate it’s a credit.

From here, reconcile the credit note in QuickBooks as usual. In JACK, the only change is that the credit note status moves to SYNCED. Once the credit note is paid in QuickBooks and synced back to JACK, the payment shows under Payments, and the status changes to PAID.