Credit Note

A Credit Note is issued to a customer to reduce the amount they owe. It can be used for returns, over-payments, discounts after invoicing, or as a refund.

When to Issue a Credit Note

• Customer returns goods
• Overcharged on a previous invoice
• Post-sale discount or price adjustment
• Product/service not up to agreed standards
• Customer overpaid and needs a refund

Creating a Credit Note

1. Go to Accounting > Credit Note and click New.
2. Select the Customer.
3. Select the Return Against — the original Sales Invoice this credit relates to.
4. Enter items being returned or adjusted.
5. The amounts default to negative, reducing the customer's balance.
6. Click Save and Submit.

How It Affects Accounting

A Credit Note posts:

• Debit: Sales Return / Income Account (reduces revenue)
• Credit: Accounts Receivable (reduces customer balance)

If VAT is applicable, the VAT is also reversed.

Creating Credit Notes from Sales Invoices

You can create a Credit Note directly from a Sales Invoice:

1. Open the submitted Sales Invoice.
2. Click Create > Credit Note.
3. Select Return or Credit Note option.
4. The items and amounts are copied from the original invoice.
5. Adjust quantities and amounts as needed.
6. Save and Submit.

Related Topics

• Debit Note
• Sales Invoice