Table of Contents
Overview
We've created this FAQ article to answer common questions about the Indigo Business Sales and Purchases modules. This article provides guidance on key topics and will continue to grow with new questions from our users, clarifications, and best practices.
When should I use a Cash Return vs. a Credit Note?
When should I use a Cash Return vs. a Credit Note?
The choice between a Cash Return and a Credit Note often depends on how the customer or supplier is managed, although exceptions may apply.
As a rule of thumb:
Use a Cash Return for occasional customers or suppliers, where transactions are typically paid and settled immediately, and any amount is refunded directly through a payment method (cash, card, bank transfer, or another payment method).
Use a Credit Note for customers or suppliers with a business account, where sales and purchases are typically invoiced and paid later, and any credit can be applied to outstanding or future invoices.
💡 Exception: Credit Note + Cash Return
For customers or suppliers with a business account, the credit is often left on account and applied to outstanding or future invoices. However, if the credit needs to be repaid, a credit note may first be issued to record the adjustment, after which the credit balance can then be refunded through a cash return.
Can I partially allocate a transaction?
Can I partially allocate a transaction?
Yes! You can do this while creating a receipt, payment or stand-alone allocation. Here's how!
From the relevant screen, select the transaction you want to partially allocate from the grid in the Transactions tab.
Select the ✏️ Edit button to open the Partial Allocation pop-up.
Modify the value in the Allocate amount field to your liking.
Select Save.
A partially allocated invoice will remain open with a reduced outstanding balance. You can verify it when allocating the next receipt or payment, or when creating your stand-alone allocation.
Can I write off an amount while allocating?
Can I write off an amount while allocating?
Yes! You can do this while creating a receipt, payment, or stand-alone allocation. Here's how!
At the top left of the grid in the Transactions tab the Write-off button to open the Write-Off pop-up.
Fill in the percentage you want to write off in the Write off % field, or the exact amount in the Amount () field.
Choose a Nominal account where to debit the write-off (the contra entry will instead credit the Accounts Receivable).
Select Save.
The written-off portion will show in the Write Off section and affect the relevant accounts accordingly.
What are we writing off? | Transaction automatically generated |
Overpaid sales payment | Adjustment Debit (AD) |
Underpaid sales payment | Adjustment Credit (AC) |
Overpaid purchases payment | Adjustment Credit (AC) |
Underpaid purchases payment | Adjustment Debit (AD) |
Which accounts are affected when allocating a sales receipt and a purchase payment?
Which accounts are affected when allocating a sales receipt and a purchase payment?
Sales Receipts (local)
Account | Entry | Notes |
Accounts receivable | Credit | System control account |
Deposit account | Debit | Selected by the user |
Bank Charges | Debit | You choose it at receipt creation |
Purchase Payments (local)
Account | Entry | Notes |
Accounts payable | Debit | System control account |
Payment account | Credit | Selected by the user |
Bank Charges | Debit | Bank charges account |
Foreign Receipts/Payments
Account | Entry | Notes |
Accounts receivable/payable | Debit if gain, Credit if loss | Adjustment Debit if gain, Adjustment Credit if loss |
Gain/loss on foreign exchange | Credit if gain, Debit if loss | Adjustment Debit if gain, Adjustment Credit if loss |
How does Indigo Business decide when to fully or partially allocate?
How does Indigo Business decide when to fully or partially allocate?
When you select transactions in receipt, payment or stand-alone allocation records to begin allocating, Indigo Business compares the transactions' Outstanding Amount with the amount available for allocation.
Selecting transactions influences the amount available for allocation as follow:
Invoices reduce the amount available for allocation.
Credit Notes increase the amount available for allocation.
Keeping the above in mind, here is how Indigo Business reacts when it comes to the actual allocation process:
Condition | Result |
Amount available for allocation < Outstanding Amount | The transaction is partially allocated. |
Amount available for allocation >= Outstanding Amount | The transaction is fully allocated. |
In the GIF below you can see how the system reacts in practice for three different scenarios:
Scenario 1: Invoice fully allocated
Amount to allocate/receipt amount = €500.
Ticked and allocated first invoice in the grid (Outstanding amount = €41.50).
To Allocate decreased (refer to table above) of €41.50.
€41.50 has been fully allocated, because €500 > € 41.50
Scenario 2: Credit Note
Amount to allocate/receipt amount = €500
Ticked a credit note in the grid (Outstanding amount = €795.00)
To Allocate increased (refer to table above) of €795.00
The new To Allocate value is €1295 (= €500 + €795.00).
€795.00 is displayed in yellow to indicate that the credit note contributes additional allocation value rather than consuming it.
Scenario 3: Invoice partially allocated
Amount to allocate/receipt amount = €500
Ticked and allocated second invoice in the grid (Outstanding amount = €1500.00)
To Allocate decreased to zero (refer to table above) as the whole amount to allocate was used for the allocation process.
The invoice has been partially allocated, because €500 < €1500.
The new invoice Outstanding amount is now €1000 (= €1500 - €500)
Related Articles