A Credit Note based on a Progressive Invoice is used when previously invoiced progress (under a project or contract) needs to be reversed or adjusted. This can occur due to:

A credit note can be created manually through the sales documents screen:
Sales → Sales Documents → Credit Notes. 

Alternatively, it can be automatically generated from the related invoice, which serves as the reference for the credit note. All the details must be automatically filled in.

Here is an explanation of the field-

Company - The organization responsible for issuing the credit note.

Contract - Refers to the agreement associated with the transaction.

Emirate - Indicates the emirate where the transaction was carried out.

Customer Order - Represents the client’s order linked to this credit note.

Project - Specifies the project or job connected to the transaction.

Apply Retention / Ret. VAT at Retention Invoice - Indicates if retention should be applied (as defined in the contract) and specifies how VAT is handled for retention-related invoices

Progressive / Advance Invoice - Indicates whether the credit note is linked to progressive billing or related to a previously issued advance invoice.

Comment - A field used for entering internal comments or notes.

Transaction Type - Describes the nature of the credit transaction.

Basis - Indicates the original invoice that the credit note is reversing.

Date of Original Supply - The date when the original goods or services were provided.

Warehouse - The location of the inventory involved, if applicable.

Item Description - Name of the returned or reversed item

Quantity - Number of units being credited

Unit Price - Price per unit before deductions

Amount - Total value of the line (Quantity × Unit Price)

VAT (%) - Applicable VAT rate

VAT Amount - Tax amount calculated on the item value

Total Before Retention - Sum of item amount and VAT before retention deduction

Retention - Deduction as per the project's retention policy

Retention VAT - VAT portion related to the retention amount

Net Total - Final credited amount after deducting retention and its VAT

Contract Asset Quantity – The part of the item that is being returned or deducted from the previously recorded contract asset

Amount – The value reversed or deducted from the contract asset, calculated by multiplying the unit amount by the quantity of contract assets to be credited back.

Note: The Contract Asset Quantity and Amount fields are automatically populated when the Fill Contract Assets button is clicked in the Contract Asset tab.

Income Account – The account where the initial revenue was recorded

Business Activity – The category used for reporting purposes (e.g., Main Activity)

Project Task / WBS – Connection to a particular segment of the project

The Deduction tab is used to record and manage any deductions related to the credit note, such as penalties, withholding taxes, or other amounts withheld before settling the credit.

Item - Name of the item being credited

Content - Short description or reference, often repeating the item name

Quantity - Number of units being credited

UOM (Unit of Measure) - Measurement unit

Price - Unit price of the item

VAT% - Value Added Tax percentage applied to this item

VAT Amount - Tax amount calculated from the price

Amount - Total pre-tax value of the item

Customer Order – Reference to the client’s request for work

Project WBS – Work Breakdown Structure level used to monitor the scope

Project – The main project name associated with the credit

Project Task – The particular task or activity being credited

Cost Object – Designated cost center or budget account

Item – The material or service being credited

Quantity – The amount credited (such as returned or reversed)

Amount – The credited value calculated by multiplying quantity by price

This tab displays the automatic allocation or settlement of the credit note amount:

Advance – Shows whether the credit relates to a previous advance payment

Is Deductions – Indicates if the row includes deductions such as penalties

Document – The original invoice connected to the credit note (e.g., MEINV25-00000002)

Customer Order – Reference to the customer order that generated the invoice

Amount – The credited amount derived from the original document

GL Accounts – General ledger accounts linked to the credited amount

Department - Specifies the internal division that issued the credit note

Responsible - Name of the employee responsible for the transaction

Use Phased Revenue Recognition - Checkbox indicating whether phased revenue recognition is applied

Terms and Conditions - Text field for contract-specific terms 

Reason - Describes the reason or justification for issuing the credit