I am shocked and utterly disgusted with Zoho Books and the validation and trustworthiness of the financials I get from Zoho Books. Today by total accident I discovered if you issue a Credit Note against a Invoice that includes items that you keep in inventory and have a Cost of Goods (COGs) associated with it when you Credit Note back that invoice which brings the inventory back into stock they do not Credit Back the COGs for that credit note.

Let me try and explain better. I have a invoice with a single line item of Item Foo. On Foo I have a COGs of 4.00.  I can see on the invoice down at the bottom the COGs is allocated.

When you do a credit note on that Invoice and look at the Credit Note it never allocates back the COGs for that credit note, so now my Profit and Loss statements are all messed up as I have COGs in a month where I sold the item but let's say I credit note it back the same month the COGs is never reduced so I have inflated COGs cost with no revenue for that COGs.  Now granted some time in the future when I sell those same goods again the COGs will be 0 so it will eventually wash out but that could be in different fiscal years. and affect the Tax Returns I file and could be interrupted as Tax Evasion by the Gov.

I have reported this to Zoho Support and waiting for some answers but this issue really affects my trust in any of the data I get from Zoho Books and if they are messing up something so simple like this, can we trust any of the data and how much auditing do I need to do to see what else they are not reporting correctly.