How to record credit notes in Xero via Dext

This artical explains how we can record credit notes in Xero via Dext. But first we need to understand what Xero and Dext are, and how they are connected.

Relationship between Xero and Dext

Xero is an accounting software. Dext is an invoice collection app and data capture tool. 

Xero and Dext are seamlessly integrated so you can capture invoices, bills and receipts using Dext and it will extract the key information to Xero in just one click of "Publish". At the same time, the invoices will be automatically organized and stored in one folder under the supplier's name.

Then Xero will have all the supplier's name, date, due date, amount, sales tax information as well as source documents as attachment aligned with its accounting friendly interface.

In case of sales tax auditing, you can easily check all the expense invoices or bills with all the information needed in "Bills To Pay" section plus source document as preview. It just saves a great deal of time checking invoices between two softwares back and forth.

How to record credit notes in Xero via Dext

Now we have a general idea of what Xero and Dext are. Then how can we record credit notes in Xero via Dext? 

Publish the credit notes from Dext to Xero

You can forward the refund receipt or credit note from your Email to Dext. If it is in paper, you can capture the paper ones with camera, and upload to Dext. Then publish it as “Credit Note” to Xero by choosing "Credit Note/Refund" under the menu of Type. Also don't forget to verify that supplier, account, amount, date and sales tax information are correct.

It is recommended to publish it as draft so that you can check in Xero later and approve it after verification.

Approve drafts

In Xero, you need to approve it from “draft” section to “bills awaiting payment” section.

Record cash refund under the credit note

You need to manually record the refund payment (date, amount) as cash refund under the credit note so when you do reconciliation, it will show up in the result page when you type the refund information in the search bar under the “match” section. Otherwise, only sales invoices will be shown as this is an amount received rather than spent. And you are not able to find the credit note in the search bar and do the reconciliation.

Reconcile against payments during bank reconciliation

At last, you just need to reconcile the refund payment (already recorded in company’s book) against the transaction shown in the bank statement lines.

  

Xero Bank Reconciliation

If you still have other question, don't hesitate to leave me a message in the comment section. I will share more tips of how to use cloud-based accounting softwares and its related integration apps.