Kenyan eTIMS credit notes for corrected invoices
How a Kenyan business issues an eTIMS credit note for an invoice recorded in Achekam, keeps the two in step, and has the credit verified.
By Achekam · · 4 min read · For Running a business businesses in Kenya
Launching soon. Some of the screens this article describes for Nigerian and Kenyan businesses are not reachable in Achekam yet. They are coming soon.
A customer returns two cartons of a damaged consignment. Another was charged the wrong unit price. A third cancels part of a service after the invoice went out. Every business issues credit notes, but in Kenya a credit note is not just an accounting entry: like the invoice it corrects, it is an electronic tax document that must go through eTIMS.
For a business that keeps its books in Achekam and issues its tax documents through one of KRA's eTIMS channels, that means doing the credit twice, once in each system, and keeping the two in step. This article sets out the order of steps, and the details that stop a credit note from causing trouble on the VAT return.
Credit notes come from the same eTIMS solution as the invoice
Kenya's eTIMS can be reached through several channels: eTIMS Lite (on eCitizen, the USSD service and the app), eTIMS Client for Windows or Android, TIMS devices, and system-to-system connections that KRA has approved. The rule for credits is simple: a credit note comes from the same eTIMS solution as the original invoice.
So the first question for any credit is: which channel issued the invoice? If the invoice was issued on eTIMS Client in the warehouse office, the credit note must be issued on eTIMS Client too, not on the owner's phone through eTIMS Lite. Note the channel on every invoice record so nobody has to guess months later.
KRA answers practical questions about credit notes, along with return forms, VAT credits and amended returns, in its FAQ on filing returns on iTax. It is worth reading before your first credit note of the year.
Issuing the credit note from the original invoice
In Achekam, a credit note is always issued from the invoice it corrects. There is no free-standing credit note without an invoice. It is posted to the ledger, can be downloaded as a PDF or e-mailed, and any leftover credit is held for the customer.
That mirrors the eTIMS rule neatly: in both systems, the credit points back to a specific invoice. Use the same order every time:
- Find the invoice in Achekam and confirm it was fiscalised, and through which channel.
- Issue the credit note in Achekam from that invoice.
- Issue the matching credit note in the same eTIMS channel, against the same original invoice.
- Record the eTIMS identifiers against the Achekam credit note.
- Have a second person verify them.
Full or partial credits for chosen lines
A credit note in Achekam can be for the whole invoice or for chosen lines. For the returned cartons, credit the line for that product; for a cancelled invoice, credit it in full. Make the eTIMS credit cover exactly the same lines, quantities and amounts. A credit that is complete in one system and partial in the other is the most common reason the two stop agreeing.
The original invoice's date and tax codes
Achekam's credit note uses its original invoice's date and tax codes. If the invoice charged VAT at the standard rate, the credit reverses VAT at that rate; if a line was zero-rated or exempt, the credit line carries the same code. That keeps the credit consistent with the invoice even if rates change in between.
Check the eTIMS credit shows the same tax treatment. If the two differ, stop and find out why before verifying anything.
Recording the identifiers for a second person to verify
Without a live eTIMS connection, a Kenyan business issues the document through its eTIMS channel, then records in Achekam the control-unit invoice number, the internal data and the receipt signature that eTIMS returned. A second person verifies them, and only then does the document count as fiscalised. For invoices, Achekam can also give you the e-invoice file to work from when issuing on eTIMS; for a credit note, work from the credit note PDF and the original invoice's eTIMS details.
Achekam prints eTIMS identifiers on a document only once it is fiscalised; until then, the document says it is not yet fiscalised. So the credit note you send the customer should be the one downloaded after verification, carrying the identifiers. The verifier should compare the recorded details with the eTIMS receipt itself, line by line.
When the customer has already paid
Many credits arrive after the invoice has been paid. The credit note then leaves credit held on the customer's account in Achekam. Agree with the customer what happens to it: set it against their next invoice, or refund it. If it is refunded, an administrator records the refund against the receipt, and the payment itself is made from your bank or M-Pesa account. Keep the customer's written agreement with the credit note, because a refund without a paper trail is exactly what a KRA audit asks about.
Credit notes on the VAT return check
Achekam's Kenyan VAT return lists the period's invoices, credit notes and till sales that are not fiscalised. It does not block the return; it tells you what is outstanding.
Make that list part of your month-end routine. An unfiscalised credit note on it usually means one of three things: the eTIMS credit was never issued, it was issued but the identifiers were never recorded, or they were recorded but not yet verified. Each is quick to fix while the month is fresh. Unfiscalised sales on the VAT return explains the list in full.
Start with the next credit
Write the five steps above on a card beside whoever issues credit notes, and add the channel to every invoice record from today. For the invoice side of the same routine, see issuing eTIMS invoices and recording them.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
