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How to Add Credit Notes to an Invoice Through OCR

Learn how to create and apply credit notes (CNs) through OCR in Precoro to process returns with ease and keep your invoice data fully aligned.

TABLE OF CONTENTS

How to Add a Credit Note to an Invoice Through OCR

Here’s how you can easily add credit notes to your invoices:

  1. Go to the AP Inbox page.
  2. Click the checkmark next to the document you want to add a credit note to → Add Credit Note button.
  3. Click + next to the invoice you want to apply the credit note to.
  4. On the next page, review the list of items extracted via OCR. Credit note items are automatically matched to the invoice items using the same logic as invoice-to-PO matching.
  5. If needed, click the Match button next to any item to reassign it manually. A dropdown will appear with available invoice items to match.
  6. Complete the required fields and adjust the item details if necessary → Submit Credit Note.
  7. Review the CN draft → click Confirm to create the document.

💡 Please note: The Submit Credit Note button will be disabled if some CN items aren’t matched to the invoice items, the credit note total exceeds the invoice, or any item exceeds the matched invoice item’s quantity or price.


How to Add Multiple Credit Notes to the Invoice

You can add more than one credit note to a single invoice—for example, if a single CN doesn’t cover the entire invoice total.

💡 Please note: You can only apply multiple credit notes if the invoice has more than one item or a single item with a quantity greater than one. For example, if an item’s quantity is 10, you can create several credit notes that total up to 10 units.

To apply another credit note to the remaining items:

  1. Return to the AP Inbox page.
  2. Click the checkmark next to the document you want to add a credit note to or upload a new one.
  3. Click the Add Credit Note button.
  4. On the Select an Invoice page, choose the original invoice again.
  5. Complete the required fields and adjust the item details if necessary → Submit Credit Note.
  6. Review the CN draft → click Confirm to create the document. 

FAQs

How is tax handled when adding a credit note to an invoice?

Tax is automatically applied based on the original invoice's tax rate. You can edit the tax manually during the draft CN review for more precise adjustments if needed.

What validations are in place when matching credit note items?

Precoro enforces several rules to ensure accurate credit note application and prevent over-crediting:

  • Quantity validation: The quantity entered in a credit note item cannot exceed the quantity of the matched invoice item.
  • Price validation: The unit price in the credit note can't be higher than in the corresponding invoice item.

These checks are applied when you review or adjust items on the Add Credit Note page, and when you make changes in the draft mode.

Do I need to match all credit note items before submission?

Absolutely. The credit note submission will be disabled if some credit note items aren't matched to the invoice items. This ensures each credit refers to something the supplier has already billed.

What happens if the credit note amount exceeds the invoice total?

Precoro will block the credit note submission to prevent discrepancies. The Submit Credit Note button will be disabled until you adjust the item values.

Can I submit a duplicate credit note?

Precoro automatically checks for duplicates using the Supplier Credit Note #. If a matching credit note already exists, you'll see a flash notification, and the system will block submission.