Recording Settlement of Sales Credits in MYOB Premier


When we discuss about settlement of sales credit or credit notes to your customers, we are dealing with those sales credits with amounts that are just part or portion of the sales invoice amount. There are more than one way to settle sales credits to your customers.  Settlement may take form in the following:

  1. Applying the sales credit amount to one or more outstanding invoices from your customer;
  2. Making a payment refund to the customer and recording the transaction in your MYOB company file.

Applying Sales Credit Amount to Customer’s Outstanding Invoices If the sales credit is to be applied to your customer’s outstanding invoice, go to the Sales main command centre and click on the Sales Register.  In the Sales Register window, go to the Returns & Credits tab and select the customer for which the credit will apply by indicating the Customer name in the field as per screenshot below:

Highlight the sales credit you wish to apply and then click on Apply to Sale as per screenshot shown below of the Settle Returns & Credits window:


Click on Record when you have entered the necessary information to save the new settlement transaction.

Take note that if you have set the Preferences to apply sales credit to oldest invoices, the sales credit amount will automatically in the Amount Applied column right beside the oldest invoice or invoices.  Take note that the credit will not apply to a sales with Order status.

Recording Refund Payment for Your Customer’s Sales Credit

When you have to pay your customer for the sales credit, you can do so by going to the Sales Register feature of the Sales main command centre and click on the Returns & Credits tab.

In the Search by: field, indicate the name of the customer you wish to pay the credit for.  If you want to display all credits for all customers, choose the All Customers option in this field.


All the credits and returns are displayed and click on the credits you wish to refund to the customer by highlighting the sales credit you wish to apply payment for and click on Pay Refund which is located in the lowest left portion of the Settle Returns & Credits window.


Indicate in the corresponding fields the necessary information as follows:

Date – if you already have written the cheque payment to the customer days before you entered the Pay Refund transaction, change the Date accordingly.

Account – indicate in this field from which bank funds the payment will be drawn.

Cheque No. – indicate the cheque number for the payment of the credit to the customer.

Customer – the customer name is automatically indicated in this field during your selection in the

Settle Credits & Returns window Payee – the payment name is also automatically indicated from the Settle Credits & Returns window when you have selected the Customer name.

Memo – you can change the memo you want to indicate in this field if you choose not to use MYOB’s standard memo information that automatically appear when you click on Pay Refund.

Cheque Already Printed – select this option if you have already prepared the payment cheque to your customer.

Remittance Advice Delivery Status – select the delivery option on how you send a remittance advice by selecting the option. Once you have finished entering and editing the information, click on Record to save the cheque payment for the customer credit.

Receiving Payments for Customers Invoices

In MYOB, you have to use different command centre feature if the nature of payment receipt pertain to customer payment of invoices that you have issued or not.  To recap, the mode of entering the receipt of payment transaction is described below:

Nature of Customer Payment How to Record Payment Option No. 1 How to Record Payment Option No. 2
Payment for Issued Invoice Using Receive Payments in the Sales main command centre Using Bank Register payment type “Receive Payment” in the Banking main command centre
Non-Invoice Payment Using Receive Money of the Banking main command centre Using the Bank Register payment type “Receive Money” in the Banking main command centre.

In this topic, we are going to discuss about entering customer payments in MYOB for the invoices you have issued.

Option No. 1 Using “Receive Payments” in the Sales main command centre

Go to the Sales main command centre and click on Receive Payments as per screenshot below:


The Receive Payments window appears below:


In the Receive Payments window, indicate the following:

Deposit to Account:   Fill in this field if the payment is deposited to the company bank account or the customer have made the payment deposit to your company account.

Group with Undeposited Funds:     Indicate in this field if you are going to deposit this account together with other undeposited funds for which you are going to use the Prepare Bank Deposit feature of the Banking main command centre.

Customer   In this field, indicate or select the customer who is making the paymentIf you have mistakenly indicated the wrong customer, you will know this if there is no outstanding account or record on the customer you have erroneously chosen, or MYOB will prompt a message that there is no outstanding account for the customer you have selected.  Thus, you have to indicate the correct customer account.

Amount Received    You indicate in this field the actual amount received for payment of the customers invoice.

Payment Method    Take note that this field don’t arise to financial information or account entry.  However, filling up this field on the details of the payment method will give you can complete information on the Payment Method by filling up information on the Details field.

Memo – You can opt to change the Memo field as being default in MYOB to give more information about the payment.

ID Number – MYOB have default ID Number assigned to each transaction.  You can opt to have your own ID number specific to the transaction.  However, duplication of the series number of your own ID number might be possible when you manually enter these numbers so it is better you use the default ID number in MYOB.

Discount – if you are going to grant a discount to your customer due to prompt or early payment, you can do so by assigning the discount to the corresponding invoice in the Discount column.

Amount Applied— Indicate the amount in the scrolling list below the Amount Applied field and enter the amount that would be applied to the specific invoice that appear on the display field. If the customer pays deposit for a sales order, you also apply the payment to the said Order as automatically indicated in the Status column of the Receive Payments window.

Finance Charge – if you are imposing finance charge to your customer due to late payment or other reasons, you indicate the amount in this field which is located in the lower right hand portion of the Receive Payments window.

Out of Balance – this field is located in the lowest right portion showing the amount that automatically appears when there is a difference in the Amount Received and Amount Applied.

When you have done entering the information in the Receive Payments window, click on Record to save.

Dealing with Overpayment from Customer

If you have received payment from your customer and it results to overpayment, you can proceed to recording the total payment received from the customer by indicating the total amount in the Amount Applied column.  A credit invoice is automatically created equivalent to the overpaid amount when you Record the payment.

To illustrate, assuming Customer Company have paid S$13,150.00 for its Invoice No. 001 account with the company amounting to S$13,000.00 or an overpayment of S$150.00.  When the payment is applied to the specific open invoice it is to be paid, the Out of Balance field would show the amount of $150.00 as per screenshot below:


When you click on Record to save the payment transaction, a pop-message will appear as per MYOB screenshot below:  



Click OK to proceed recording the Receive Payments transaction and at the same time, automatically record 1 credit memo due to customer overpayment.

Take Note:  That the number of credit memo automatically generated from recording customers’ payment will also depend on the number of overpayment arising for each invoice being applied with the payment.  In the illustration above, the customer pay one invoice and result to one overpayment for that specific invoice.  In this case, only one credit memo is automatically recorded because only one invoice have resulting overpayment.  The number of credit memo automatically generated will depend on how many invoices with overpayments from customers.

For illustration purposes, assuming Customer Company have two outstanding invoices with corresponding payments received as follows:

Invoice Date Invoice Amount = Total Amount Due Payment Amount = Total Amount Received Overpayment Amount
04/01/2014 S$2,600.00 S$2,660.00 S$60.00
04/01/2014 S$1,300.00 S$1,320.00     20.00
Total S$3,900.00 S$3,980.00 S$80.00

The sales payment information above are  recorded in MYOB Receive Payments window of the Sales main command centre as follows:


When saving the transaction by clicking on the Record field, a pop-up message appears informing that the payment will result in 2 credit memos and that you have to use Settle Credits to apply the credit to an open receivable or to issue a refund cheque payment for the credit in the absence of any open invoice.


To view the result of the total of 3 credit memo generated in two scenarios above, go to the Sales Register of the Sales command centre.  In the Sales Register window, click on the All Sales tab which show all the sales transactions in just one window.  In the rightmost field look for “CreditStatus column as per screenshot below:


Another option to view all sales credits which is more efficient is to directly click on the Returns and Credits tab which would only display these type of transactions.  See screenshot of the tab below:


Take note that when you enter Sales transaction for the customer with credits, MYOB will prompt message for the presence of credit or credits for the customer.

Settlement of customer credits is discussed in the next topic.


Sale of Items with Insufficient Inventory in MYOB

MYOB have built-in feature to allow you to record sale even with insufficient inventory available on hand.   To do this, you have to set up in the Setup Preferences under the Inventory tab to “Allow the Sale of Items with Insufficient On-Hand Quantities [System-wide].  Take note that recording sales of items with insufficient inventory will result to negative inventory figures and values and may affect not only the values but the costing of the item as well.  Below is the screenshot on setting up the Preferences.


For illustration purposes, assume that Sample Company is going to sell 2,000 units of PP01 Paper Products but only have 1,700 total units on hand from all warehouse locations as per screenshot below:


When you try to record the sale of 2,000 units of PP001 Paper Products, MYOB will prompt that the inventory would result to negative quantity as per screenshot below:


To proceed recording of the sale even if the transaction result to negative inventory quantities and values, click on OK.  After saving the sale transaction, the inventory count of the item reflect a negative balance of 300 units in Location 1 as per screenshot below:


Take note that you cannot record the above sale if you keep track of the item movement and if you have not set up this Inventory Preference for allowing recording of sale with negative on-hand quantities unless you have actually recorded receipt of the unavailable items. This feature, however, provide more control on your inventory figures and most likely don’t result to reconciling items in your inventory quantities and values.

You can also opt to create an order and buy the unavailable inventory or back order the item in order to proceed recording the sale.

When sale of items with insufficient quantities is recorded, the cost that is recorded is actually not the cost but would be based on an estimated cost for recording purposes.  Take note that when the insufficient is subsequently purchased, the difference of the actual purchase cost from the estimated inventory cost is recorded in the automatic journal entry that will be generated.  The estimated cost of the item would be based on the following in the order of priority:

1)    Average Cost – this costing method is first used when you have available stock on hand for the sold item and the unavailable quantity will be computed with cost based on unit cost of the available item.

2)    Last Cost – in the absence of average cost data, the estimated cost will be based on the last cost of the item.

3)    Standard Cost – this cost method will be used if you have never purchased the item before but you have set up a standard cost for the item under the Buying Details tab when you have created or set up the item.  This procedure is discussed in the previous topic How to Set Up Items in MYOB Premier.

4)    Zero cost – this cost is used when you have not purchased the item and you opt to assign a zero cost for the unavailable item.

Changing the Status of a Sale

MYOB Premier gives you powerful time-saving tool and one of these is its ability to convert a sales quote into an order or invoice.  This feature saves you considerable time as compared to having enter another sales order or invoice from a previously entered quote. As discussed in the previous topic, you can convert the following sales transaction status as follows:

  1. Convert a sales quote into an Order or into an Invoice;
  2. Convert a sales order into an Invoice.

Take note that you cannot change an invoice status into an order or a quote because a financial transaction have already been recognized to record the sale and the reduction of the inventory arising from the sale.  As a result, you need to delete the sale transaction (if you have opted otherwise that transactions can be reversed or  reverse the sale transaction if you have Setup in the Preferences under the Security tab that Transactions Can’t be Changed; They Must Be Reversed [System-Wide] as per screenshot below:


There are 3 ways you can use to change a sales status from a quote or from an order.  These ways are as follows:

  1. Through the Sales window of the Sales main command centre;
  2. Through the Sales Register window;
  3.  Through the To Do List window when you are changing status of several orders into Invoice status.
  1. Changing Sales Quote status using the Sales window of the Sales main command centre

To do this, go to the Sales main command centre and type the name of the customer in the Customer field with whom you convert a quote into an order or invoice.

The Select from List window appears showing all sales transaction status appear including all quotes, orders or invoice.  In the Select from List sales status display, doubleclick on the quote you wish to convert into an order or invoice.


In the Select from List sales status display, doubleclick on the quote you wish to convert into an order or invoice.  The Sales – Edit Item window appears per screenshot below


Click on Order as shown in the lower left hand portion of the Sales – Edit Item window if you want to change the quote into an order.  You have to change the quote into an invoice status, click on Invoice tab which is just beside the Order tab.

  1.  Changing Sales status using the Sales Register window

To do this, go to the Sales main command centre and click on Sales Register as per screenshot below:



Click on the Quotes tab if you want to change the status of a quote into an order or invoice.  Likewise, you click on the Orders tab if you want to change the status of an order into an invoice. For illustration purposes, assuming you want to convert a sales order from ABC Supplies Company into an Invoice.

To do this, in the Sales Register window, go to the Orders tab and select the customer whose order you want to change into an invoice and indicate the date you wish to display the information in the Dated From and To fields.


The window appears showing you being directed to the Enter Sales Invoice window as follows: After you click on Change to Invoice, theSales – New Item appearsbelow.

In this screen you  can make changes on other information fields like the Date, Comment, Tax Code except the sales information itself like the quantity Ship, Item and Price, Promised Date.

Click on Record to save the changes you made and the new invoice after you have made the necessary changes to the invoice transaction.


  1. Changing the status of Sales Order using the To Do List window.

Using the To Do List window allows you to simultaneously convert several quotes or orders to different status.  To do this, go to the To Do List window which is located in the lower left portion below any main command centre and select the Orders tab as per screenshot below:


The To Do List window appears showing tabs you can choose from.  Click on the Orders tab and select which of the orders from the items displayed you wish to convert into invoice by clicking in the Select column (with checkmark) which is just beside the Balance Due column and then click on Record as Actual which is located as per screenshot below:


When you click Record as Actual, MYOB prompts you to enter a date you want your sales transaction journal to be recorded then press OK as per screenshot below:


The orders you have selected will now become invoices so that when you view the Sales Register, the previous orders are now in the Open Invoices tab of the Sales Register window.

Setting Inventory Prices in MYOB

Basis for Calculation or Costing Methods in MYOB Premier

In MYOB, you have to indicate which cost method would you base the computation for setting the item prices.  You have the option to use the Average Cost or the Last Cost of the inventory items that you sell. When the items you sell are purchased at different prices at different point of time, MYOB calculate the Average Cost as the total cost of an item divided by the total quantities on hand.  While for Last Cost, of course, it is the latest price or the newest price for which you acquire the item from your most recent purchase.

MYOB Premier allows you flexibility on setting item prices by allowing you to change the default selling prices of the items you sell.  You have the option to do manual setting of prices for each item or you can update several items at once by using the Shortcuts feature of Set Item Prices window. To update item prices, go to the Inventory main command centre and select Set Item Prices as per screenshot below:


The following screen appears in in the Set Item Prices window:


 Take note that on the Set Item Prices window, all items that you held for sale should be displayed on this window. In case the items you wish to display and set prices to are not displayed, this may be cause by the following:

  1. You have not yet created the item in the Items List; or
  2. You have not set up or linked the item in the Profile of the item under the Item List option.

To enter a new price to an item by indicating in the Current Price column.  You can indicate up to four decimal places for the Current Price and click on OK to save the changes.  Take note that for invoicing purposes, the decimal places would be up to two decimal places.

You can also simultaneously update prices of several items also by using Set Item Prices screen and select the column next to the items you wish to update the price then click Shortcuts as per screenshot below. 



Indicate the following information in its corresponding field as per the fields you want to as follows:

Use Calculated Price

Round Price – you have the option to indicate to round price Down, To Nearest, and Up

Make Price a Multiple Of

Make Price End in

Percent Margin – if you indicate the percentage of the margin, the Current Price is automatically computed based on the figure you fill up in this field.

Percent Markup – by indicating on this field the percentage markup for the item, the Current Price also change computed based on the figure you indicate in this field.

Gross Profit –if you want to set a specific or desired amount as gross profit to earn from a certain item, you fill the amount of the

Basis for Calculation – on this field, you have two options for which to base the calculation of setting the prices:  either by using Average Cost or using the Last Price as discussed sub topic Basis for Calculation or Costing Methods in MYOB Premier.


Managing Accounts Payable in MYOB

MYOB allows you effectively manage your accounts payable by providing you reports that enable you to review your payables status as well as reviewing your purchase information.  There are many features and tools that enable you to effectively manage your payables transactions. The following tools and features enable you to do this as follows:

To Do List –  you can view and generate a report on unpaid bills

Analyse Payables

Purchase Reports

Purchase History

Find Transactions

Purchases Register

Transaction Journal

By using the To Do List You can also generate a list of unpaid bills for which you may sort by days overdue.  Choose on the A/P tab and the following screen appears below:


You can analyse and monitor your payables transactions by using the Analyse Payables function which is a feature under the Analysis feature which you can access in any main command centre.  See screenshot of the feature as seen in Accounts main command centre.  To do this, go to the Purchases main command centre and click on Analysis and choose Payables.



On the Payables Analysis window, there are three ways you can analyse Payables as follows:

1)    Summary

2)    Supplier Detail

3)    Purchase Detail

Screenshot below shows the Summary view which shows the total amount due and summarized per supplier:


Supplier Detail analysis shows the amount payable to a specific supplier as you have indicated in the field and shown on a per month basis.  See screenshot of the report below:


Purchase Detail displays all the transactions affecting the purchase transaction you have selected to be displayed for a particular supplier.  For example, you want to know if a particular bill is paid and the date it is paid as per screenshot below:


Assuming you want to view transaction history for the S$3,200.00 per Bill no. 004.  When you select this bill as highlighted in the above screenshot, the following screen appears:



Use of Purchase Reports

MYOB provides you with a wide array of reports to choose from by going to the Reports feature.


The wide choice of reports to choose from in your MYOB file enable you to analyse your Accounts Payable transactions in so many ways.  There are 9 main report category and under these categories are the specific report modules you can easily choose from to answer your reporting requirements as follows:

1.)   Payables

Ageing Summary

Reconciliation Summary

Reconciliation Detail

Summary with Tax

2.)   Items

Purchases Summary

Purchases Detail

Analyse Purchases (Spreadsheet)

3.)   Supplier

Purchases Summary

Purchases Detail

Analyse Purchases (FY Comparison)

Analyse Purchases (Spreadsheet)

Supplier Ledger

4.)   Purchase Register

All Purchases

Closed Bills

Open Bills and Orders


Returns and Debits

Open Item Receipts

5.)   Payments

Supplier Payment History

Supplier Payments

6.)   Other Purchase Reports

Bill Transactions

Purchase History by Supplier (Officelink)

7.)   Transaction Journals

Purchases & Payables Journal

8.)   Recurring Transactions

Recurring Purchase Transactions

Recurring Transactions List

9.)    To Do List


Recurring Purchases

Expiring Discounts

Per the above reports, all you have to do is further explore the reports generated to become more familiar of its uses and you can decide which report you can generate to provide the right financial information for a specific requirement.


Take note that MYOB reports have the following options as follows:

  1. View Sample – this option enables you to display and view a sample report you have selected.  For example, you choose to view a sample report for Open Bills and Orders, MYOB will display the following sample report as follows:PIC9


  1. Customise – this option enables you to further customise the report selected according to your preference.  In clicking on this field, the following window appears:PIC10

If you want to further revise the Format for the report you selected to be customised, MYOB give you the following option as follows to revise the Format:


    1. Print – this option allows to print, of course to the printer.
    2. Send To – enable you to display or generate report as follows:

Excel Format





Tab Delimited Text File

Comma-Separated Text File

Simple Text File


Settlement of Supplier Debits in MYOB Premier

You have learned to record supplier debits and how it affects your MYOB company file in the previous topic.  Now, you are going to learn the proper way to record settlement of debits by your supplier.  Your supplier may settle the amounts they owe arising from the supplier debits as follows:

  1. Payment of settlement cheque refund
  2. Offset of the amount owed to your purchase payments which may apply to one or more than one purchase bills.

 Recording of Settlement Refund Through Cheque or Other Form of Payment from your Supplier

Go to the Purchases Register of the Purchases main command centre. On the Purchases Register window, click on Returns & Debits tab and indicate the Supplier name in the Search by List so that all the debits for the supplier appears and click on the debit that is being refunded by the supplier.  Once you have highlighted the debit for which the cheque refund applies, click on Receive Refund field which is located in the lower left portion of the window as per screenshot below:


If the supplier pay a cheque refund, you indicate the account for which the amount is deposited and click on the Details field for the details of the cheque payment like the cheque number, bank name and the date of the transaction if you need to change the default date which is the date of entry in MYOB.  Click on Record to save the changes made to the Receive Refund transaction entry. See screenshot below for your reference:


Recording Supplier Debits to Offset or Apply to Unpaid Purchase Bills

If your supplier have advised or confirmed offset or application of the amount they owe you to your outstanding purchase bills, you need to record the offsetting to clear the outstanding bills.  To do this, also go to the Purchases Register of the Purchases main command centre and also click on the Returns & Debits tab, just like the steps you follow in recording receipt of payment for supplier debit in the previous topic.  This time, however, you select the field Apply To Purchase which is beside the Receive Refund feature.  Screenshot appear below for your reference:


The Settle Returns & Debits screen appear below and in this window, you are going to select which bill or invoice you are going to apply the debit.  Unless otherwise agreed between the company and the supplier, it is best to apply the debit amount to the oldest due bill or invoice.  If you have setup this feature in the SetupPreferences option under the Purchases tab as shown below, the amount of debit will automatically be applied against the oldest due bill as per screenshot below:


However, if you have not setup the Preferences, you would need to indicate the amount to be applied beside the bill amount which is located in the righter corner after the amount. Click on Record once you have entered the necessary information.




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