# How to get money back when a supplier overcharged you

Send the supplier the invoice, the agreed price and the difference. Ask for a credit note. Enter it in Xero and apply it to the bill. If you already paid, take the credit on your next bill.

## Short answer

1. Work out the overcharge, line by line.
2. Ask the supplier for a credit note.
3. Enter it in Xero and apply it to the bill.
4. If you already paid, take the credit on your next bill or ask for a refund.

## Before you start

Gather the evidence.

- The invoice with the wrong price.
- The quote, price list or contract that shows the right price.
- Any email where the price was agreed.

The ATO calls the document that corrects a taxable sale an adjustment note. A supplier credit note usually does that job. See the ATO's [GST adjustment notes ruling GSTR 2013/2](https://www.ato.gov.au/law/view/document?DocID=GST/GSTR20132/NAT/ATO/00001&PiT=99991231235958). It says a supplier must issue an adjustment note within 28 days of the earlier of your request or the supplier becoming aware of the adjustment. For the GST side of a price decrease, see the ATO page [Making an adjustment because of a rebate](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/rules-for-specific-transactions/gst-and-rebates/making-an-adjustment-because-of-a-rebate). It says you cannot claim a decreasing adjustment until you hold the adjustment note.

## The manual way in Xero

1. Email the supplier. Give the invoice number, the lines that are wrong, the agreed price and the amount. Ask for a credit note.
2. When it arrives go to Business > Bills to pay and choose to add a credit note. Enter the supplier, date, number, lines and tax code.
3. Approve the credit note.
4. Allocate it to the original bill if that bill is unpaid. If it is paid, allocate it to a later bill or record a refund.
5. Attach the supplier's PDF to the credit note.

Limits:

- Xero will not tell you the invoice was wrong. You find that yourself.
- Xero applies a credit to a bill that is approved and unpaid. If you have already paid, you have to allocate the credit another way.

## The Pulsify way

Pulsify can catch the overcharge before you pay, and it handles the credit note after.

1. Upload the supplier's agreed prices under Database > Price Lists.
2. A bill at a different price shows "Price list: $X each" before you approve. Hold the bill and ask the supplier to correct it.
3. When the credit note arrives, Pulsify reads it as an adjustment note and links it to the original bill in Xero.
4. Pulsify warns you if the credit is bigger than the original bill.
5. On approval, Pulsify creates the credit note in Xero and allocates it to the bill.

Pulsify does not move money. It does not chase the supplier for you.

## Worked example

Example Concrete Supplies billed 30 bags of cement at $11.20. The agreed price was $9.80.

- Overcharge per bag: $1.40.
- 30 bags: $42.00 ex GST.
- GST on that is $4.20, so the credit note total is $46.20.

You email the invoice number and your quote. The supplier sends a credit note for $46.20. You enter it, apply it to the unpaid bill and pay the net amount.

## Common mistakes

- Paying first and asking later. You then have to chase a refund.
- Asking for a credit with no evidence. Attach the agreed price.
- Forgetting the GST on the credit note. A credit for $42.00 ex GST is $46.20 with GST.

## Next step

[Try an invoice](https://app.pulsify.tech/sign-up) to catch the overcharge before you pay. See the [credit notes guide](/guides/credit-notes/) and the [credit note generator](/credit-note-generator/).

## Common questions

### How long does a supplier have to issue a credit note?

The ATO says a supplier must issue an adjustment note within 28 days of your request or of becoming aware of the change, whichever is first. Terms in your contract may add to this.

### What if I already paid the bill?

Ask for a credit note and apply it to your next bill, or ask for a refund. In Xero you can allocate the credit to a later bill or take a refund and record it against the bank account.

### Does the credit note change my GST?

Yes. A decrease in the price changes the GST you claimed. The ATO says you should hold an adjustment note before you claim the decreasing adjustment. Your credit note should show the GST amount.

Source: https://www.pulsify.tech/how-to/get-money-back-when-a-supplier-overcharged-you/ (last checked 2026-10-19)