# How to apply a credit note to a vendor invoice in Sage 300

In Sage 300, enter the credit note for the vendor, then allocate it to the A/P invoice it credits. Pay the balance that is left.

Applying a supplier credit note means recording the credit and allocating it against the bill it reduces, so you pay only the balance.

## Before you start

- Sage 300 Accounts Payable
- Security authorisation for the screen

## The Sage 300 way

Where to find it: Accounts Payable > A/P Invoice Entry (credit note)

1. In Invoice Entry choose Document Type Credit Note.
2. Optionally set Apply To Document to the invoice. If it applies to several invoices leave it blank.
3. Enter and post the batch.
4. Apply the credit later in Payment Entry (Applying Prepayments and Credit Notes).

## Limits in Sage 300

- Discounts are not applied to credit notes or debit notes.

## The Pulsify way

1. Forward the supplier's credit note to your Pulsify address. Pulsify recognises it as a credit note.
2. Pulsify flags a credit note with a missing or unknown original invoice, or an original smaller than the credit.
3. Choose the original bill and approve.
4. Pulsify creates the credit note in Sage 300 against the original bill.

Pulsify connects to Sage 300. We set up the connection for you.

What Pulsify does not do here:

- Pulsify does not handle partial allocation across several bills.
- Credit note handling is limited to the cases listed above.

## Common mistakes

- Posting the credit note and never applying it in Payment Entry.
- Expecting a payment discount to reduce a credit note.

## Common questions

### How do I enter a credit note?

In Invoice Entry choose Document Type Credit Note. Set Apply To Document to the invoice, or leave it blank if it applies to several. Enter and post the batch.

### When is the credit applied?

Later, in Payment Entry (Applying Prepayments and Credit Notes).

### Do payment discounts apply to credit notes?

No. Discounts are not applied to credit notes or debit notes.

### Does Pulsify read credit notes?

Yes. It recognises supplier credit notes and flags a missing or unknown original invoice.

## Sources

- https://cdn.na.sage.com/docs/en/customer/300erp/2023/open/Sage300_AccountsPayable_UserGuide.pdf

Source: https://www.pulsify.tech/how-to/apply-a-supplier-credit-note-in-sage-300/ (last checked 2026-10-19)