Getting an overcharge back: supplier credit notes

Before you ask, rule out your own side. Read the line again on the original, not a copy someone typed up: a misread figure on a scan is more common than a supplier's sum being wrong. Check that the rate you're comparing with was in force on the invoice date, in the same unit, and that any extra charge wasn't agreed.

The guidance on business.gov.au for disagreements with suppliers starts in the same place: check your facts, and if you have a written contract, read it carefully.(business.gov.au: Suppliers)

A request the supplier can check in a minute gets credited faster. Put in it:

Stick to documents the supplier can see: their own invoice and what you both agreed. What you've paid before, with no agreed rate, is a good reason to ask about a price, but it isn't something the supplier agreed to, and a credit request built on it reads as an accusation. The same goes for what another supplier charges.

There are two usual ways to settle it. You can pay the invoice and have the supplier credit the difference, which then comes off a later payment. Or you can pay the part that isn't in question and keep back the amount that is, until the supplier credits it or shows you why it's right.

If you pay short, do it cleanly: keep back only the amount in question, not the whole invoice, and tell the supplier in writing, when you pay, what you've kept back and why. An unexplained short payment just looks like an overdue balance from their side.

Check your account terms first. business.gov.au lists price and payment terms, and dispute resolution terms, among what a supplier contract should include, and yours may say how a disputed amount is handled.(business.gov.au: Suppliers)

One case needs care. Each state and territory has security of payment laws, and in most of them a contractor in building and construction can issue a payment claim, which gives the party paying a strict timeframe to pay, upfront or under a payment schedule, and a claim that isn't responded to can go to adjudication. If a supplier's invoice comes as a payment claim, deal with it within that timeframe rather than just keeping back the amount you dispute, and check the law where the work was done.(business.gov.au: Laws affecting contracts)

When a supplier credits part of a purchase, the price of the purchase has changed, which the ATO treats as an adjustment event. If you've already claimed the GST credit for the purchase on an earlier activity statement, you may need to make an adjustment; if you haven't reported the purchase yet, you report the final amended price instead.(ATO: When to make adjustments)

For GST the document is an adjustment note, and suppliers often call theirs a credit note. A supplier generally has to issue one within 28 days of your asking, or of becoming aware of the adjustment where it issued a tax invoice. The ATO's ruling on adjustment notes sets out what one has to contain, and your accountant can tell you how the credit goes on your BAS.(ATO: GSTR 2013/2 Goods and services tax: adjustment notes)

Until the credit arrives, the money is owed to you, so keep a list: the invoice, the amount, when you asked and what the supplier said. When a credit note comes in, tie it to the request it answers, so one credit isn't counted twice. The ATO generally asks businesses to keep their records for five years, and some records for longer.(ATO: Overview of record-keeping rules for business)

If you can't settle it with the supplier, business.gov.au lists who may be able to help: the Australian Small Business and Family Enterprise Ombudsman, the consumer protection or fair trading agency in your state or territory, and your state's small business commissioner, if it has one.(business.gov.au: Suppliers)

When CostCode holds an invoice, each finding carries its evidence and, where it's about money, the difference in dollars. A query to the supplier quotes only what they can check (the rate you agreed and the line on their own invoice, GST, the unit, or the same invoice sent twice), never your purchase history, and it goes only when a person in your team reads it and presses send. Supplier email is off until an owner or admin turns it on, and until then the held invoice shows the query for you to copy and send yourself. With it on, a query nobody answers gets a follow-up drafted at 7 and 14 days, which a person sends.

A project manager or above records the supplier's credit note against the finding: the amount, up to what the finding was for, and the date it arrived. That closes the finding and puts the credit on Recoveries, CostCode's ledger of every finding, how it was settled and the dollars credited back, which exports to CSV. A credit note that arrives as a document isn't checked as an invoice: it waits in the review queue beside the open findings from the same supplier it could answer, and a person picks the one it settles.

On a held invoice, the same person can pay it short instead: CostCode approves the rest for payment and withholds the amount in question, which stays against its findings on the recovery ledger until the supplier credits it, and the payment run lists what to pay and what's withheld. CostCode withholds only on findings the supplier can be shown, so a price up on your own history is paid and stays open for your team, and paying short isn't offered while something paying less wouldn't settle is open, such as a possible duplicate or a tax invoice with no ABN. The amount kept back is the finding's own figure, which for a price is before GST.