Overview
A credit-only payment run happens when selected bills are fully covered by available supplier credit notes in Xero.
In this case, Batchly can allocate the supplier credit notes to the selected bills without creating a cash payment for those bills.
This is useful when a supplier has outstanding credit notes that should be applied before making another payment.
What is a credit-only payment run?
A credit-only payment run means the selected bills are settled using supplier credit notes instead of a bank payment.
This can happen when:
- A supplier has available authorised credit notes in Xero
- The available credits are enough to fully cover the selected bill or bills
- No remaining cash amount is required after the credits are applied
A credit-only outcome means the bill is settled in Xero, but there is no cash amount to include in the banking file for that bill.
How it works
When Batchly identifies that supplier credit notes fully cover a selected bill:
- Batchly applies the available credit notes to the bill in Xero
- The bill balance is reduced by the credit note allocation
- No cash payment is created for that bill
- The bill is settled once the credit allocation is successfully written back to Xero
Credit-only runs are especially helpful when you want to clean up supplier balances without manually applying each credit note inside Xero.
Examples
| Scenario | Credit Applied | Cash Payment Required |
|---|
| Bill amount is $1,000 and available credits are $1,000 | $1,000 | $0 |
| Bill amount is $1,000 and available credits are $1,200 | $1,000 | $0 |
| Bill amount is $1,000 and available credits are $600 | $600 | $400 |
The third example is not credit-only because there is still a remaining cash amount after the credit note is applied.
What appears in the banking file?
Credit-only bills do not create a cash payment line in the banking file.
This is because the bill is being settled by supplier credit notes, not by a bank transfer.
If your batch run contains both credit-only bills and cash-paid bills:
- Credit-only bills are settled by credit note allocation
- Cash-paid bills are included in the banking file
- Only the cash amount appears in the banking file
What happens in Xero?
Batchly writes the credit note allocation back to Xero. The bill balance is reduced by the amount of the credit note allocation.
When the credit notes fully cover the bill:
- The bill is settled in Xero
- The supplier credit note balance is reduced
- No payment amount is sent to the bank for that bill
You can review the credit note allocation in Xero against the relevant supplier, bill, and credit note records.
What suppliers see
If you send remittances from Batchly, the remittance helps explain which bills were included and how they were settled.
For credit-only bills, the remittance may show:
- The bills included in the run
- The amount settled by credit note
- The cash payment amount, if any
This gives the supplier more context when the bill has been settled but no bank payment was made for that bill.
When to use credit-only runs
Credit-only runs are useful when:
- A supplier has outstanding credit notes in Xero
- You want to settle bills without making an unnecessary cash payment
- You want to clean up supplier balances
- You want to avoid manually applying credit notes one by one in Xero
Important notes
- Batchly only uses credit notes that already exist in Xero
- Credit notes must be authorised and available in Xero
- Credit notes can only be applied to bills for the same supplier
- Credit-only bills do not appear as cash payment lines in the banking file
- If credits only partly cover a bill, the remaining amount may still require a cash payment
- Credit note allocations are written back to Xero as part of the Batchly workflow