Credit Notes, Debit Notes & Tax Invoice Adjustments

Once an official tax invoice has been issued or cleared through tax authorities (such as ZATCA or the UAE FTA), statutory regulations strictly prohibit direct alteration or deletion of the document. Any price correction, returned merchandise, or cancelled transaction must be executed through formal Credit Notes or Debit Notes.

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1. Statutory Cryptographic Linkage

Under ZATCA Phase 2 e-invoicing and GCC VAT rules:

• Original Invoice Reference: Every Credit Note and Debit Note must explicitly record the UUID, sequence number, and issue date of the original tax invoice it adjusts.
• Cryptographic Chaining: The adjustment voucher receives its own unique cryptographic stamp and is chained into the sequential hash sequence.
• Reason Codes: Mandates statutory reason descriptions (e.g., Goods Returned, Defective Merchandise, Post-Invoice Discount / Price Correction, Cancellation of Contract).

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2. Customer Credit Notes (Sales Adjustments)

When a customer returns items or receives a post-sale billing reduction:

• One-Click Creation: Open the issued invoice in BIZA and select Issue Credit Note.
• Flexible Adjustment Scope:
  • Full Reversal: Reverses the entire invoice value and VAT.
  • Partial Item Return: Select specific line items and returned quantities; restores inventory back to the warehouse.
  • Financial Price Adjustment: Adjusts only the monetary value or discount without moving physical stock.
• Accounting Ledger Impact:
  • Debits Sales Returns or Sales Revenue.
  • Debits Output VAT Payable (reduces VAT tax liability).
  • Credits Accounts Receivable (reduces customer balance or creates an unallocated customer credit balance).

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3. Supplier Debit Notes (Purchasing Adjustments)

When returning defective materials to a vendor or claiming an overcharge:

• Goods Return to Supplier: Generate a Debit Note linked to the original Purchase Entry or Supplier Bill.
• Warehouse Stock Decrement: Removes returned items from the designated warehouse inventory.
• Accounts Payable Adjustment: Decreases outstanding debt owed to the supplier and adjusts Input VAT Receivable in the tax register.

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4. Credit Application & Refund Vouchers

Unallocated credit note balances can be resolved cleanly:

• Apply to Future Invoices: Settle subsequent invoices against the open customer credit balance with one click.
• Cash / Bank Refund: Issue a formal refund payment voucher transferring funds back to the customer's bank account.