Raising a credit note from an existing purchase order has the advantage of pre-filling the purchase's billable line items and details to minimise data entry.   If the purchase order you are raising the supplier credit from is linked to a project, it will track the supplier return value o the project's profitability.

From the purchase order dashboard, search for and open the required purchase order's detail page.  Click the Credit Note button to create the supplier credit note.

The supplier credit note will display the line items and details from the purchase order.   Enter the quantity for the lines that you want request a credit and/or return.  Remove the line items that are not being credited by clicking the X at the end of the line.

If you are returning a FIFO product that is currently in your stock on hand, select the Remove items from Stock and Return to Supplier checkbox to manage the stock control.   Selecting the Return Items to Stock checkbox will move the FIFO product back into stock.  If left deselected, there will be no stock movement for the return and it is assumed the stock will be written off.  Confirm the credit note details are correct and click Save Credit Note

Review the draft supplier credit and click Approve to queue the supplier credit for import to Xero.  Print and Email to Supplier as required.