Your China supplier accepts a claim for misprinted retail boxes in the first batch and offers a credit on your next purchase. The second order's proforma shows the normal deposit, with no mention of that credit. The salesperson says accounting will deduct it later. Before paying, agree which invoice and payment stage receive the adjustment, and what happens if your business never places another order.
The boxes and credit arrangement are fictional illustrations, not customer transactions or standard supplier terms. This article is general information, not legal, accounting, tax or investment advice. Qualified advisers must assess the settlement, documents and applicable law. A supplier credit is not cash received, and this article does not establish a right to deduct a disputed claim from another debt.
Obtain an accepted settlement for the first order
Identify the original contracting parties, order, invoice and claim reference. The supplier's authorised representative should confirm the agreed credit amount and currency, the goods or findings it covers and any matters that remain open. Your authorised buyer needs to accept the actual terms after appropriate review, including any waiver or full-settlement wording.
The supplier-refund guide distinguishes cash refunds from repair, replacement and future credit. For this arrangement, ask the seller for the settlement record and any credit note or other supplier-issued document the accountant requires. A chat promise to offer a discount leaves finance without a confirmed credit to apply.
Have counsel check who can bind each business. A credit offered by one seller is not available against an invoice from a different legal entity merely because the salesperson works with both. If the parties propose another entity receiving or honouring the credit, obtain professional advice and the necessary agreements before treating the obligations as connected.
Decide whether the credit reduces the deposit or the balance
Send the seller the proposed repeat order and ask it to show how the agreed credit will apply. Keep the new goods value, current charges, earlier credit and resulting payment obligations distinguishable. Your company needs a due deposit and later balance that both finance teams can explain.
If the credit reduces the deposit, have the supplier acknowledge how much of the required deposit the credit satisfies and how much new money is due. If it only reduces the final balance, your business may still need to fund the full deposit. Agree that timing before approving the cash plan. A buyer's internal deduction does not change the seller's payment terms.
Ask the accountant which supplier documents and accounting treatment fit the actual arrangement. Preserve the full commercial history rather than replace the original goods invoice with a lower total that conceals the quality settlement. The commercial invoice and payment schedule may have different purposes; customs treatment needs the broker's review.
Put both orders in the application agreement
Article 29 of the CISG text addresses modification by agreement and provisions requiring written modification. Counsel must check applicability, declarations and the form required for the actual settlement and purchase. It does not establish a universal cross-invoice set-off right.
Purchasing could propose the following application record for the fictional boxes:
| Credit field | Terms to obtain from the parties |
|---|---|
| Original claim | Seller, buyer, first order, invoice and accepted settlement scope |
| Credit granted | Amount, currency, supplier-issued record and authorised acceptance |
| New obligation | Same parties, second order and approved invoice version |
| Application stage | Deposit, balance or another expressly agreed payment event |
| Amount applied | Agreed drawdown and resulting amount due at that stage |
| Remaining credit | Unused amount, permitted future use and any expiry or minimum-order condition |
| No repeat purchase | Agreed outcome if the order is not placed or does not proceed |
| Closure | Seller acknowledgement of application and buyer's matching record |
These are editorial negotiation fields, not a credit-note format or an accounting rule. Agree a conversion basis and who bears any difference if the new invoice uses another currency. Do not subtract unlike currencies or convert the credit using an exchange rate your buyer selected without agreement.
Keep the credit independent of an unapproved purchase
Review conditions such as an expiry, minimum order, eligible products or a named invoice. A salesperson may offer a concession only with a larger purchase. Your buyer needs to recognise that obligation when comparing the proposal with cash back or another settlement, rather than accept excess stock to use a nominal credit.
Ask what happens to unused credit if the second order is smaller, cancelled or never placed. Discuss whether the parties agree a cash payment, continued credit or another outcome. None follows automatically from the word "credit". If the repeat order already exists, amend it through the required process rather than assume an internal purchasing hold changes its terms.
Your team should also distinguish a previously granted claim credit from a discount on the new goods. Keep each reason and amount visible. The supplier must confirm whether a new promotion is additional or replaces its earlier proposal; finance should not count the same concession twice.
Give finance one approved amount to fund
Reconcile the accepted second invoice with its payment schedule and the agreed credit application. Mark superseded versions and retain their history. The second-invoice guide helps determine what a replacement invoice changes before another transfer.
If using a payment provider, submit the supplier documents and the agreed payable amount through its review process. Ask whether it accepts the request as documented. The provider does not owe your supplier credit, so do not ask it to deduct a disputed claim or add its own credit note. Funding should follow the accepted payment instruction and current quote.
Use the partial-payment guide to keep actual invoice credits and later cash instalments distinct from token funding. The amount of stablecoins your company sends cannot establish how much of the first claim the supplier applied to the new order.
Obtain acknowledgement when the credit is used
Ask the seller's accounting contact to confirm the amount applied, the payment stage it satisfied, any new money received and the remaining credit. Carry those references into both purchase files. Keep a credit merely promised separate from one the seller has confirmed applying.
Check the first claim for other agreed remedies before closing it. A replacement shipment or cash receipt covering the same settlement amount needs reconciliation; do not apply a credit again after receiving compensation that the parties agreed would replace it. Keep any unresolved part of the claim visible under the settlement's actual scope.
Use pay an invoice to ask A2vanta about the resulting supplier payment before funding. Your buyer and seller agree and account for the defect credit. Payment handling does not negotiate the settlement, create a set-off right or guarantee that the supplier honours a future concession.