Overview

Batchly can help apply supplier credit notes to authorised bills in Xero during a payment run.

When you select bills for payment, Batchly checks whether the supplier has available authorised credit notes in Xero. If credit notes are available, Batchly can allocate those credits against the selected bills before creating the cash payment.

This helps reduce manual credit note allocation in Xero, lowers the cash amount required for the payment run, and keeps a clear audit trail of what was settled by credit and what was paid by cash.

How credit note allocation works

Batchly uses supplier credit notes that already exist in Xero. It does not create new credit notes.

When you run a payment workflow in Batchly:

• Batchly imports authorised bills from Xero
• Batchly checks for available authorised supplier credit notes
• You select the bills you want to include in the payment run
• Batchly calculates whether supplier credits can be applied
• Credit notes are allocated to the relevant bills in Xero
• Any remaining cash amount can continue through the normal payment workflow

Examples

What happens in Xero

When Batchly applies a supplier credit note, the allocation is written back to Xero. This means the bill balance in Xero is reduced by the value of the credit note allocation.

Depending on the value of the available credit notes, the bill may be:

• Fully paid by cash — No credit note is applied, and the full selected amount is paid by cash.
• Partly settled by credit note and partly paid by cash — The credit note reduces the amount that needs to be paid.
• Fully settled by credit note — The bill is covered by supplier credits, so no cash payment is required for that bill.

Each bill remains visible in Xero, and the credit note allocation can be reviewed as part of the bill and supplier record.

What appears in the banking file

Only the cash payment amount is included in the banking file.

If a bill is partly covered by a credit note, Batchly includes only the remaining cash amount in the banking file. If a bill is fully covered by a credit note, no cash payment is required for that bill.

Banking file examples

What suppliers see

If you send remittances from Batchly, the supplier remittance helps explain what was included in the payment run.

Depending on the payment outcome, the remittance may show:

• Bills included in the payment run
• Amounts paid by cash
• Amounts settled by credit note
• The total cash amount paid to the supplier

This helps suppliers understand why the cash payment may be lower than the total value of the bills included in the run.

Important notes

• Batchly only applies credit notes that already exist in Xero
• Credit notes must be available and authorised in Xero before they can be used
• Credit notes are applied against bills for the same supplier
• Only the remaining cash amount is included in the banking file
• If a bill is fully covered by credit notes, no cash payment is required for that bill
• Credit note allocations are written back to Xero as part of the Batchly workflow

When to use this

Credit note allocation in Batchly is useful when:

• A supplier has multiple outstanding credit notes in Xero
• You want to reduce the cash amount paid in a supplier payment run
• You want to settle credit notes and bills together as part of the same workflow
• You want a clearer record of what was settled by credit and what was paid by cash