Credit Note Rules

Credit Note Rules

Overview

Batchly can apply available supplier credit notes to selected bills in Xero during a payment run.

There are some rules that determine when a credit note can be used. These rules help make sure credit note allocations are applied correctly and remain aligned with Xero.

This article explains the main rules and limitations for credit note allocation in Batchly.

Credit notes must exist in Xero

Batchly only uses supplier credit notes that already exist in Xero.

Batchly does not:

  • Create new supplier credit notes
  • Edit the original credit note details
  • Change the supplier on a credit note
  • Convert bills into credit notes
Xero remains the source of truth for supplier bills, credit notes, contacts, balances, and payment records.

Credit notes must be authorised and available

A supplier credit note must be authorised and available in Xero before Batchly can apply it to a bill.

Batchly cannot use credit notes that are:

  • Draft
  • Voided
  • Deleted
  • Fully allocated already
  • Not available in the latest Xero sync

If a credit note has already been partly used, Batchly can only use the remaining available balance.

Credit notes must match the same supplier

Batchly only applies supplier credit notes to bills for the same supplier.

For example, a credit note for Supplier A cannot be applied to a bill for Supplier B.

ScenarioCan Batchly Apply the Credit?Reason
Supplier A credit note to Supplier A billYesThe supplier matches
Supplier A credit note to Supplier B billNoThe supplier does not match
Supplier credit note already fully usedNoThere is no remaining credit balance available

Credits are applied to selected bills

Batchly applies supplier credit notes as part of the selected payment run.

This means credit note allocation is based on:

  • The bills selected in Batchly
  • The supplier linked to those bills
  • The available supplier credit balance in Xero
  • The amount due or selected payment amount for those bills

Batchly does not automatically apply supplier credits to unrelated bills outside the selected payment run.

Credit notes do not appear as bank payments

Credit note allocation is not a bank payment.

Only the remaining cash amount is included in the banking file. If credits fully cover a bill, there is no cash payment line for that bill in the banking file.

Bill AmountCredit AppliedBanking File Amount
$1,000$0$1,000
$1,000$400$600
$1,000$1,000$0

Partial credits may still require a cash payment

If available credit notes only cover part of a selected bill, the remaining balance may still need to be paid by cash.

For example, if a bill is $1,000 and the supplier has $400 in available credits, Batchly can apply the $400 credit and leave $600 as the remaining cash amount.

If partial payments are enabled for your organisation, you may be able to choose a smaller cash payment amount and leave the unpaid balance open in Xero.

What Batchly does not do

Batchly does not:

  • Create new supplier credit notes in Xero
  • Apply credit notes across different suppliers
  • Use draft, voided, deleted, or fully allocated credit notes
  • Apply credits that are not available in Xero
  • Create a bank file payment line for a credit-only amount
  • Change the original supplier, invoice, or credit note details in Xero

Important notes

  • Xero remains the source of truth for bills, credit notes, contacts, and balances
  • Batchly can only apply credit notes that are visible and available after syncing with Xero
  • Credit notes must belong to the same supplier as the selected bills
  • Only the remaining cash amount is included in the banking file
  • Fully covered bills may result in a credit-only outcome
  • Partly covered bills may still require a cash payment unless partial payments are used

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