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Subject: Re: [ubl-dev] Invoices, Credit notes, charges, allowances, oh my!


 From my limited experience in retail, where we tried to keep 
everything as simple as possible.... 

A credit note is the equivalent of "cash" - it was issued at a previous 
time. Say someone bought three things (invoice "a") - and it turns out 
one is "the wrong size" - and we can't supply a replacement - so we 
issue a credit note (invoice 'b' as a credit balance - the credit 
balance includes the taxes paid on the item)  and take the one item 
back. Invoice b and a are now connected. 

At some time after, another item is purchased - invoice 'c' say - and 
the customer pays for it using credit card, cash and a credit note 
(invoice b).  Any current  applicable tax is on the item purchased on 
invoice 'c').  The credit note though is just a cash equivalent and 
shows up as one of three methods of payment - cash, credit card and 
credit note (invoice 'b'). 

Not exactly the same - but the principles would be the same.  Using 
Ken's example - I would issue a credit note for EUR110 total - the line 
items being EUR100 (the thing you are issuing the credit against with 
reference to the original Invoice #) plus EUR10 (presumably since the 
original item was taxable).  The notions of allowance/charge didn't 
seem to me to be relevant to the transaction - but like I said - 
different domain. 

Cheers..Hugh

CyberSpace Industries 2000 Inc. 
MultiMedia Productions
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Quoting "G. Ken Holman" <gkholman@CraneSoftwrights.com>:
> At 2009-07-08 15:42 +0200, Roberto Cisternino wrote:
> > > As I understand it, charges on an invoice increase the amount of the
> > > invoice, and allowances on an invoice decrease the amount of the invoice. 
> > >
> > > When a credit note is issued against the invoice, are charges on the
> > > credit note increasing the amount of the credit note (and allowances
> > > decreasing the amount of the credit note), or because it is a credit
> > > note should the use of the two concepts be reversed?
> >
> >absolutely not, Allowance/Charge are a stable meaning
>
> So, then, an allowance is *always* a decrease and a charge is
> *always* an increase in whatever document it is being used?
>
> > > The issue is that cac:AllowanceCharge is context free, and the
> > > definitions are not biasing one way or the other:
> > >
> > >    "An association to Allowances and Charges that apply to the 
> Credit Note
> > >     as a whole."
> > >    "An association to Allowances and Charges that apply to the Invoice as
> > >     a whole."
> > >
> > > My answer was "it can be either way because a community gets to
> > > define which way the allowances and charges are expected for any of
> > > the documents". 
> > >
> > > Is there a "best practice" for which way to go on credit notes?
> >
> >I think Allowance / Charges are just used into a classic Invoice. 
>
> But what about this scenario:
>
>    I issue an invoice for EUR1000 with a 10% charge which adds EUR100
>    for a total of EUR1100. 
>
>    I issue a credit note for EUR100 and need to accommodate the 10% so
>    that the total is EUR110.  Is the EUR10 considered (a) a line item in
>    the credit note, (b) a charge in the credit note, or (c) an allowance
>    in the credit note?
>
> >A Credit Note is precisely referred to Amounts specified into one or more
> >Invoices (or part of these) that your business previously issued with some
> >mistakes on amounts or even with no reference to the actual PO received by
> >your Customer. 
> >
> >The Credit Note is not referred to a precise Allowance / Charge on a given
> >item but usually is referred to a Line Item total Amount. 
> >
> >The important part is to reference exaclty which part of an Invoice is
> >corrected by a Credit Note. 
>
> So you think it is (a) in my scenario and that AllowanceCharge should
> not be used in the credit note even though it is available to be used
> in the structures?
>
> Any other opinions from UBL-Dev members?
>
> Thanks for your guidance. 
>
> . . . . . . . . . . Ken
>
> --
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> G. Ken Holman                 mailto:gkholman@CraneSoftwrights.com
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>
>
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http://cyberspace-industries-2000.com




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