Invoice questions › What is a credit note?
What is a credit note?
A credit note reverses an earlier invoice in full or in part. You use it for a mistake, a return or a discount given afterwards.
A credit note is the opposite of an invoice. Where an invoice charges an amount, a credit note takes that amount, or part of it, off again. Your customer gets money back or owes less.
When do you make one?
The familiar cases:
- There is a mistake on an invoice you have already sent.
- A customer sends back (part of) the order.
- You give a discount or an allowance after the fact.
- An order falls through after you had already invoiced it.
What has to be on a credit note?
A credit note carries the same details as an ordinary invoice, plus a reference to the original: its number and its date. The credit note also takes its own next number. The VAT goes back with it: 21% on the invoice means 21% on the credit note, but as an amount taken off.
An invoice your customer already has is never edited. You make a credit note and then, if you need one, a new and correct invoice. In the editor pick 'credit note' as the document kind and enter the amounts as negatives.
You make a credit note in the editor by picking 'credit note' and entering the amounts as negatives. No account needed to look around.
Create an invoiceRelated
- Correcting a mistake on an invoice you already sent
- The difference between a quote, an invoice and a credit note
- Do invoice numbers have to be sequential?
This page is a summary, not legal advice. Invoicing is set at EU level but the details are national, so check with the European Commission or your own tax authority if your situation is unusual.