Standard Operating

Procedure for Credit Notes

Working of MIS
 Introduction

Introduction:
This SOP serves as a guide to effectively update credit notes within our MIS. Its purpose is to ensure
accurate recording and management of credit notes raised by the accounts department against
existing invoices. By incorporating this streamlined process within the MIS, we aim to eliminate
revenue duplication and provide a robust framework for handling invoice cancellations and credit
allocations.

Definition of Credit Notes:

Within our organization, credit notes play a pivotal role in two significant scenarios.

Firstly, they enable the cancellation of existing invoices, allowing for the issuance of new invoices
with revised details.

Secondly, they facilitate the provision of credit to parties with outstanding dues.

It is imperative to integrate credit notes into our MIS to maintain accurate revenue records. Failure
to update credit notes against corresponding invoices would result in revenue duplication,
undermining the integrity of our financial data.

Objective:
The objective of this SOP is to establish a standardized process for managing credit notes within the
MIS. By adhering to this procedure, we aim to ensure consistency, accuracy, and efficiency in
updating credit notes, thereby enhancing the overall financial management system.
 CREDIT NOTES WORKING IN REVENUE SHEET OF MIS

Procedure

Extracting Credit Notes Sheet from Zoho:

Access Zoho:-

Log in to your Zoho account.

Login Credentials:-

User Id 60017245770
Organization ID 60017246837
Mail ID accounts@infrabeat.com
Password ***************

(For Detailed procedure of logging in to Zoho, refer the SOP for Revenue Sheet of MIS)

SOP for Revenue Sheet of MIS

This dashboard will pop-up:-

Navigate to the Sales Module in the Navigation Panel.

Export Credit Notes:-

To export credit notes from the dashboard, follow these steps:

• Access the dashboard interface and locate the three dots icon located on the right side corner.

• Click on the three dots icon to reveal a dropdown menu.

• From the dropdown menu, select the "Export Credit Notes" option.
Export interface will be as follows :-
Customize the Period:

Customize the period for which you want to extract the Credit Notes. This can typically be done by
specifying the desired date range from the report options.
Select the template :-

Opt for the "Credit note_MIS" export template, which already encompasses all the necessary fields
for updating credit notes in our MIS report.

Export as XLSX:

To finalize the export process and generate the report in XLSX format, please follow these steps:

• Once the report is prepared and ready for export, locate the "Export As XLSX" option.

• After selecting the XLSX format, locate and click the "Export" button.

• The system will initiate the export process, converting the report into an XLSX file.
Save the report in the specified folder:-

Destination folder for saving the Credit Notes Report.

Formatting the Zoho Report

Create an easily usable format for A/c Transactions, as illustrated below:-

 The first look of A/c transactions report will be as follows-

Modify the report to align with the format of the MIS revenue sheet, so that it can be used
feasibly.

 Insert 3 columns at the beginning:-

• In the first column, calculate the "Actual Amount" by multiplying the "Item Total (Column K)"
with the "Exchange Rate (Column N) " to get Inr Amount.
• In the second column, populate the "Credit Note Number" (Column E), and in the third
column, include the "Credit Note Date" (Column D). Then, in the fourth column, copy and
paste the values from the "Actual Amount" column.

• In the first column, paste only the values to remove the formulas and retain the calculated
values.
The resulting report will have the following structure:

 Insert a row at the top and put a sub-total formula;-

• Hide the unnecessary columns (Column F to K, O, and P) to streamline the report.

• Apply a filter to the report to enable data filtering and analysis.

• Filter the "Credit Note Status" column (Column N) to display only the entries with a status of
"Void" and remove those filtered entries from the report as those are of no use.
Open the MIS report and navigate to the revenue sheet:-

Path for MIS Report

Updation of Credit Notes

To access the MIS report, simply click on the provided link:-

Link for MIS Sheet

 Access the Revenue sheet for the relevant period in the MIS Report.
 Filter the Customer Name, one by one, & Start updating the MIS.

For Example,
 Filter the same party (ASHOK LEYLAND LTD., for instance) in both the reports, as shown
below:-

 Now, proceed to update the credit note by matching the invoice number in Zoho Report
with the corresponding entry in the MIS.

 Since the invoice number is 237 for both credit notes and it exists in the MIS, you need to
insert rows below each corresponding invoice in the MIS and input the credit note details as
follows:

i) Copy and paste the invoice information as it is into the inserted rows:-
 ii) Copy the invoice number and invoice date from the credit notes sheet, and paste them
into the corresponding cells of the inserted rows in the MIS revenue sheet.

iii) Modify the credit note amounts to be negative, as they represent cancellations of
previously created invoices.

That’s how we update all the credit notes in MIS, ensuring accurate record-keeping and reflecting
the cancellation of invoices.

RECO. OF CREDIT NOTES

After updating all the Credit Notes, it is crucial to ensure that none of the Credit Notes are left for
updating.

To accomplish this, you can use Reco procedure. The Reco procedure involves performing a
thorough reconciliation check to verify that all Credit Notes have been accurately updated and
accounted for.

By diligently following this procedure, you can guarantee that no Credit Notes are inadvertently
overlooked or omitted during the updating process.

Procedure
a. Create a new sheet in the Credit Notes Workbook & name it as Reco.
b. Copy all the Credit Note Numbers from the Credit Notes sheet to the Reco sheet, and
remove any duplicate Credit Note numbers to retain only the unique ones.

c. Use the SUMIF formula to calculate the total sum of invoices for each unique invoice
number from both the Invoice sheet and the MIS Revenue Sheet.
d.) Calculate the difference between the totals from step c.

e.) Apply a Number filter on the Difference column to display only the values greater than
₹200.
Based on the current display, it is evident that no credit notes are shown, indicating that all credit
notes have been successfully updated in the MIS and, ensuring the completeness and integrity of the
credit note records within the MIS.

If any party is still present, it implies that the corresponding party has not been updated in the MIS.
In such cases, it is essential to ensure that all necessary information related to the party, including
credit notes, is accurately recorded in the MIS to maintain data integrity.

Furthermore, it is important to check whether new invoices have been raised against the invoices for
which credit notes have been passed. If the new invoices have not been generated, it indicates that
these parties should be flagged as being in an "unbilled" status. This helps to ensure proper
tracking and follow-up on the outstanding invoices and ensures that all parties are appropriately
accounted for in the MIS.
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