The Create > Credit note function for purchase orders should be available when the purchase order status is "Invoiced". Additionally, the Create > Credit note function should be available when the purchase order status is "Received" and invoices have already been posted for the purchase order. Finally, the Accounts Payable roles (A/P Clerk, A/P Manager) should have security access to the Create > Credit note functionality.

Currently, in the scenario where a credit needs to be created against a purchase order where invoices exist - due to either a keying error or mistake by the vendor - the following needs to be done:

1. Create a new purchase order.


2. Create a credit note on the purchase order by referencing the invoice that needs to be reversed.


3. Confirm the purchase order.


4. Approve the purchase order (if required).


5. Invoice the purchase order.

OR

1. Add lines (negative to reverse the invoice error and positive to re-establish for proper invoicing) to the existing purchase order.


2. Confirm the purchase order.


3. Approve the purchase order (if required).


4. Invoice the negative line(s) on the purchase order.

Based on this, Accounts Payable would need to contact a Buyer to either create the new purchase order or add lines to the existing one. This is completely inefficient for all parties, as the Buyer should not need to get involved to resolve an Accounts Payable mistake.

Additionally, creating a new purchase order to resolve an invoicing error is poor practice and should not be the recommended approach for the following reasons:

1. The new purchase order has no linkage to the purchase order where the invoicing error was made. This is terrible from an audit trail perspective.


2. The original purchase would have an incorrect "Invoice remainder" quantity.  If this was a vendor error, the revised invoice that is received could not be applied against the original purchase order. 

In the normal course of business, Accounts Payable should create the credit note.  However, this is not possible as Accounts Payable users do not, and should not, have access to maintain purchase orders due to segregation of duties controls.

Accordingly, the Create > Credit note function should allow Accounts Payable to add both negative and positive lines to the original purchase order to properly address the "Invoice remainder" quantities.

However, this access should be limited to prevent Accounts Payable from maintaining purchase orders (i.e. create new, edit, delete) outside of the Create > Credit note function to maintain appropriate controls.