A debit note adds to an invoice that charged too little: a rate revised upward, freight left off, a short count. It is the opposite of a credit note, and like one it points at the invoice it corrects, which keeps its number and its history.
Raising one
- Open the invoice or bill of supply. It must have been sent.
- Choose Create debit note on its menu. A draft opens for the same customer, place of supply and currency, with the invoice’s lines at nothing.
- On each line, enter what was undercharged: the extra quantity, or the difference in rate. Remove lines that add nothing, or add one for a charge left off.
- Give the subject: why the customer owes more. It prints.
- Save, then Send it or mark it sent.
A debit note is always raised from its invoice. New on the Debit notes list takes you to your invoices to choose one, because a debit note that named no invoice could not be declared.
What is checked before it goes
- It adds something: a debit note for nothing is not sent.
- It is dated on or after its invoice.
- Its invoice stands: not a draft, cancelled, void or withdrawn by a credit note.
- Its month is open: once GSTR-1 for a month is marked filed, a debit note in it is not sent or cancelled. Date it in a month still open.
Once sent it is final, like an invoice. A wrong one is cancelled while nothing has been paid on it, which takes its GST and what it added off again.
Collecting it
A sent debit note is owed like an invoice. It is due on the invoice’s own terms counted from its own date: an invoice due in 30 days gives a debit note due 30 days after it is raised.
- Record the money in Payments received and apply it to the debit note, as you would to an invoice. It reads partially paid, then paid.
- Unpaid past its due date it turns overdue.
- It shows in What you are owed, receivables ageing, the customer’s statement and their portal, where they can pay it online if you take payments online.
GST and the books
| Where | What it does |
|---|---|
| GSTR-1 | Listed with credit and debit notes as note type D, against its invoice: CDNR for a registered customer, CDNUR for a large B2C sale or an export. One against a small B2C sale is netted into B2C small by state and rate, as the return asks. It adds tax, not quantity, to the HSN summary. |
| GSTR-3B | Its tax is added to outward supplies in its own month. |
| Ledger | The customer owes more, against sales and output GST, as the invoice posted. |
| Tally | Sent as a Debit Note voucher against the customer. |
An example
- An invoice for 100 cartons at ₹500, with 18% GST. ₹59,000.
- The agreed rate was ₹520. The invoice charged ₹20 a carton too little.
- A debit note is raised from that invoice: 100 at ₹20, with 18% GST. ₹2,360.
- The customer now owes ₹59,000 on the invoice and ₹2,360 on the debit note, and pays each like an invoice.
Numbers and who may raise them
Debit notes to customers have their own series, SDN. It is listed in Settings, Numbering once the first one is raised, and changed there like any other. They do not share numbers with debit notes to suppliers, so the count of documents issued in your return has no gaps.
Roles have their own Debit notes line under Sales. It started as each role had for invoices, and can be changed on the Roles screen.
Not counted yet in commission, targets and channel partner figures. Those count invoices and credit notes.
Where to go next
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