How to clear Purchase Credit Notes

A refund isn't a credit note. You usually need a refund and a credit note to match.

So, does the supplier currently owe you £54?

John

What were the transactions? Why did you get a refund?

... there are a number of ways of processing refunds, so we need to know the whole history so we can advise the best treatment.

However, it seems like you have entered a credit note, as a purchase refund would show as PR. Is the refund showing in your bank account? If not I think you need to go into supplier refunds/write off, select the account and refund credit note and match againt your credit note to clear. If it is in the bank, how did it get there? 

Are you saying cancel your question and replace it with a different one?

... you should have matched against a credit note, or if you underpaid subsequent invoices then pick it up when matching invoices against the cheque amount, or you need to post an internal credit note to clear it out. Although if it were not a set off against an invoice or a refund of a credit note I would probably have posted via bank receipts and not supplier refunds! 

"in future, if I receive a (cash) refund from a supplier I'll receive it as a bank receipt rather than using the supplier refund method." Don't do that unless it's appropriate in the circumstances! If you don't receive a credit note you can post the refund directly to the bank but not if the credit note has been entered or there is an overpayment.

.... you treat it depending on the particular circumstance. Do you not have an accountant? I would expect my clients to call with minor queries like this, I would rather spend 5 minutes on the phone now than sort out a pile of dung at the year end!

..it sounds to me that you do owe the £114 to your supplier for the later invoice and the earlier refund of £168 was made without your supplier issuing the correct paperwork, in this case a credit note.

If so, ask your supplier for a credit note to cover the £168 and allocate the refund against it. If they won't, I'd raise an internal (dummy) document showing the VAT breakdown, as it's important you deal with any VAT you need to repay if you reclaimed it against the original invoice(s) for £168. Post it and allocate the refund against it, file it with all the rest of your supplier invoices and credit notes, sending a copy to your supplier. Then you'll automatically have dealt with the VAT aspect, keeping out of trouble with HMRC.

Incidentally, I don't believe you can use bank receipt to get a refund from a supplier into your supplier ledger, you have to use supplier refund (or do it manually if you know how to).

Apart from all this, unless your accounts have very low value, £54 isn't an earth-shattering amount in the scheme of things but I understand you want your supplier ledger cleared up - your accountant will be able to advise you over the telephone.

Good luck!

If you get a refund with no paperwork, just post a bank receipt, with credits to VAT and the appropriate N/L expense, why hassle putting it through the purchase ledger? May be that's the difference between accountants and book-keepers, the former just want the end result right, the latter want that too, but following the text book procedure?

....but I already knew.

This is why I hate posting on Accountingweb and, therefore, very rarely do. If one doesn't describe every single aspect to the tiniest detail it gives someone that considers themselves either better informed or better qualified the chance to display their superiority - I hope I've helped make you feel better about yourself and apologise for trying to help someone.

... all that howling at the full moon last night!

May be that's the difference between accountants and book-keepers, the former just want the end result right, the latter want that too, but following the text book procedure?

Do they want the end right at any expense? I often have to query the nominal that a 'learned' accountant wants to shove some annoying and inconvenient figure in to make the 'end result right' I have to explain that that is a control account and in this case should always show nil after transactions have taken place - or some such. I wonder if accountants had a hand in the building of the Titanic. Probably.