# Supplier credit notes in SAP B1 for wholesalers

SAP B1 has supplier credit notes built in. Short and damaged deliveries are routine in wholesale. Each one should produce an A/P credit memo from the supplier, tied back to the original A/P invoice.

## Why it matters for wholesalers

- An A/P credit memo that is never applied reduces nothing. The bill gets paid in full and the credit sits as an open balance.
- Returns, rebates and settlement documents look like credits but follow different rules. Mixing them loses the trail.

## For wholesalers in SAP B1

- For stock sent back, create the Goods Return and copy the A/P credit memo from it, so the credit ties back to the returned lines.
- For volume rebates, a General purchasing blanket agreement tracks terms for a year-end bonus. Compare the supplier's rebate credit with the fulfilment percentage before you accept it.
- Credit memos can also be copied from the original A/P invoice when the whole bill needs reversing.
- An A/P credit memo reduces actual inventory levels and applies negative amounts to the accounts of the invoice it clears, so stock and ledger move together.
- Use a Goods Return Request when the supplier agrees to take stock back for a refund or credit. In Document Settings (Per Document tab) the setting Reopen Doc. by Creating Returns/Goods Returns/Credit Memos Based on It decides whether the purchase order reopens for a replacement delivery.

## What SAP B1 does on its own

A/P credit memos.

A goods return counts under Goods Receipt PO and lowers the purchased amount in reports.

What you need and the setup steps: https://www.pulsify.tech/supplier-credit-notes-for-sap-business-one/

## Example

Example Glass Jars Pty Ltd delivers 1,000 jars. 80 arrive broken. The warehouse logs a short delivery and the supplier issues an A/P credit memo for 80 jars.

- Original invoice 7730, 1,000 jars: $4,000.00 (Paid at $4.00 a jar)
- Credit note CN-402, 80 jars returned: -$320.00 (Matches the damaged quantity on the delivery docket)
- Net payable after credit: $3,680.00 (Credit applied against invoice 7730)

The credit is matched to invoice 7730 through the delivery docket and applied. The wholesaler pays $3,680 plus GST, not the full invoice.

## Common mistakes

- Letting the supplier issue a credit but never applying it to the invoice it belongs to.
- Accepting a credit for a lower quantity than the damage report shows.

## Step-by-step guides for SAP B1

- How to apply a credit memo to a vendor invoice in SAP B1: https://www.pulsify.tech/how-to/apply-a-supplier-credit-note-in-sap-business-one/

## What Pulsify adds

Pulsify reads A/P credit memo documents like invoices and flags one with a missing or unknown original invoice. Pulsify connects to SAP B1. We set up the connection for you. More: https://www.pulsify.tech/invoice-processing-automation/

## Common questions

### How does Business One tie a credit to a returned delivery?

Create a Goods Return, then copy the A/P credit memo from it. The credit memo can also be copied from the original A/P invoice. This keeps the credit linked to the stock that went back to the supplier.

### How do I make sure a short delivery produces a credit?

Book the real received quantity on the goods receipt PO the same day. The difference between ordered and received is the claim. Send the docket to the supplier and ask for the credit before the bill is paid.

### How do I credit a Business One invoice?

Open A/P Credit Memo and copy from the A/P invoice, then Add and reconcile.

## Sources

- https://help.sap.com/docs/SAP_BUSINESS_ONE/68a2e87fb29941b5bf959a184d9c6727/44fd93db93202463e10000000a1553f7.html
- https://learning.sap.com/courses/sap-business-one-implementation/using-blanket-agreement-in-purchasing-documents-1
- https://help.sap.com/docs/SAP_BUSINESS_ONE/68a2e87fb29941b5bf959a184d9c6727/450a572b37ca1f2ce10000000a1553f6.html
- https://help.sap.com/docs/SAP_BUSINESS_ONE/68a2e87fb29941b5bf959a184d9c6727/45071a63f61941dee10000000a1553f6.html
- https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/tax-invoices

Source: https://www.pulsify.tech/supplier-credit-notes-in-sap-business-one-for-wholesalers/ (last checked 2026-10-19)