How to process Chargebacks to Suppliers

What is a chargeback?

This occurs when a business has already paid a supplier, which has under supplied or supplies are damaged and needs to be charged back a certain amount.

This can also sometimes occur when a Sub-contractor has been paid for works that are incomplete.

So how do we process this Xero?

A common mistake is to raise an invoice in Xero with the job number and cost centre.

Unfortunately we can’t actually process it this way. Instead we need to raise a credit for the supplier that is getting back charged including the cost centre and job number. 

This credit can then be offset against future invoices or paid by the supplier. This is the only way it can be done so that the back charge is picked up on the Job Cost Summary report and Budget v Actual comparisons in the GJ Software.

See Example below: