The Debit Note is used to record adjustments to an Invoice Receiveda document issued by a supplier or subcontractor to revise or correct previously issued invoices. It allows correction of overcharges, service deductions, retention adjustments, or settlement entries related to supplier or subcontractor invoices.
This document ensures that supplier liabilities reflect the correct payable amount after any post-invoice corrections.A Debit
How to create
The debit note can be created manually through the purchasing documents screen:using the Generate option from the related Invoice Received document, with all required details automatically populated.
Alternatively, it can be created from the Purchasing module
Purchasing → Purchasing Documents → Debit Notes.
Alternatively, it can be automatically generated from the related invoice received document, which serves as the reference for the debit note. All the details must be automatically filled in.
Main Tab
The Main Tab captures the essential details that identify and control how the Debit note is processed.
Company Name - Client or company for whom the debit note is created.
Contract -Contract Contract linked to the transaction.
Recognize Expenses in Payment Application Received - When If already enabled , expenses are recognized automaticallyin Invoice received, it will be automatically enabled in debit note.
Subcontractor Agreement - Links Links the debit note to a subcontractor agreement. The original invoice received is being reversed or adjusted.
Transaction Type - Purpose Purpose of the debit note:
Goods Return - For returning physical items. when materials, equipment, or supplies provided by a subcontractor are physically returned
Invoice Correction - To correct amounts/quantities without returning itemsThis is used to correct errors in the subcontractor’s invoice without returning physical goods.
- Mutual Settlement adjustment- Used to adjust Accounts Payable balances based on mutual agreement between contractor and subcontractor.
Project -Project Project associated with the transaction.
Apply Retention / Ret. VAT at Retention Invoice -Apply Apply retention and retention VAT rules as per contract.Progressive / Advance Invoice-Indicates if linked to a progressive or advance invoice receivedthe contract.
Basis - Original The original invoice received is being reversed or adjusted.
Date of Original Supply -Date Date when the original goods/services were supplied.
Entity Name -Legal Legal entity issuing the debit note.
Warehouse -Inventory Inventory location involved (if applicable).
Comment -Internal Internal notes or remarks.
Expense Tab
Item - for each entry in the transaction. Specific work or service line
Content -Describes the work or service performed, often linked to WBS.
Quantity (UOM)-Number of units involved, with unit of measure.
Price -Unit Unit price for the item or service.
Discount % -Percentage Percentage discount applied to the item, if any.
Discount -Amount Amount of discount applied.
Amount -Total Total value before VAT and retention; calculated as Quantity × Price minus Discount.
VAT% %-Applicable Applicable VAT rate for the item.
Total (before Retention) -Total Total amount including VAT, before applying retention.
Retention -Percentage Percentage of the amount withheld as retention, based on contract terms.
Retention VAT -VAT VAT component of the retention withheld.
- VAT Amount -Monetary Monetary value of VAT for the item.
- Total -Net Net payable amount after applying VAT and retention.
Project Task -Specific Specific task or activity within the project that this item relates to.
Project WBS -Work Work Breakdown Structure code linking the item to a project task or subtask.
Subcontract WBS -Code Code that links the expense to the subcontractor’s part of the project for tracking costs.
Department -The The internal department responsible for the expense, usually shown with code and name.
Expense Item - The type of cost or GL account used to classify the expense.
Business Activity -The The area of work the expense relates to, such as subcontracting, procurement, or internal services.
Customer Order -Links Links the expense to the client’s order or deliverable that it supports.
Cost Object -Optional Optional field to connect the expense to a cost center, asset, or internal tracking unit.
Comments -Notes Notes or references for internal use, documentation, or audits.
Deduction tab
The Deduction tab is used to record and manage any deductions related to the debit note, such as penalties, withholding taxes, or other amounts withheld before settling the debitA debit note is issued to revise or adjust the deduction amounts applied to an invoice received from subcontractor.
Item - Name of the item.
Content - Brief description of the item name.
Quantity - Number of units being debited or deducted.
UOM (Unit of Measure) - The unit used to measure the quantity.
Price - Price per unit of the item.
VAT % - VAT rate applied to this item.
VAT Amount - VAT calculated based on the price and quantity.
Deduction Amount - Total value of the deduction before VAT (Quantity × Price).
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This tab shows how the debit note amount is automatically applied or settled against related payments and documents:
Advance -Indicates Indicates if the debit note adjusts a previously made advance payment.
Is Deductions - Shows amounts from earlier deductions (like penalties or withholding) included in this debit note.
Document - The original invoice or document linked to this debit note.
Purchase Order -Reference Reference to the purchase order tied to the original invoice or transaction.
Amount -The The debited amount related to the original document.
Accounts Payable GL Accounts -General ledger accounts affected by the debited amount.
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Additional Information tab
In. Doc# - Unique identifier Unique reference number for the debit note.
From Date - Date when the debit note is issued.
Department - Internal division issuing the debit note.
Responsible - Employee responsible for the transaction.
Reason -Explains Explains the reason or justification for issuing the debit note.
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