Credit Notes
Create and apply customer credits and invoice adjustments.
Credit notes document a customer credit, refund adjustment, correction, or reduction to an amount owed.
Use credit notes when you need an auditable finance record. Do not rely only on an email or note when the customer's balance should change.
When to Use a Credit Note
Use a credit note when you need a clear finance record for a price correction, returned work, customer credit, billing adjustment, or amount that should reduce what the customer owes.
Do not use a credit note when the invoice was simply created with the wrong customer or should be canceled entirely. In those cases, review whether editing, voiding, canceling, or recreating the invoice is cleaner for your accounting process.
Create a Credit Note
Open Finance > Credit Notes, create the credit note, choose the customer, add the relevant items or amount, review taxes and notes, then save or send it according to your finance process.
Before saving, confirm:
- The customer matches the invoice or balance being adjusted.
- Line items, tax, discount, and totals match the credit being issued.
- The reason is clear enough for future audit review.
- Any related invoice or payment context is attached or mentioned.
- The status matches whether the credit is draft, sent, or applied.
If the credit relates to a customer complaint, cancellation, returned work, or tax correction, add enough notes for finance to understand the reason later without searching email threads.
Review Before Sending
Preview the credit note the same way you preview an invoice. Confirm customer, amount, currency, tax, reason, and any invoice reference are clear to the customer.
If the credit note should not be customer-facing yet, keep it in draft until the finance owner approves the wording, amount, and related invoice context.
Apply To The Right Context
Before applying or sending, decide whether the credit relates to:
- a specific invoice
- a customer balance
- a refund adjustment
- a service correction
- a pricing or tax correction
The credit note should explain the context clearly enough for accounting, support, and the customer to understand later.
Keep Records Clear
Explain the reason for the credit in the notes. This helps your team understand the adjustment later when reviewing customer balances, reports, or payments.
If a credit note is sent to a customer, use plain language. Explain what the credit is for, which invoice or service it relates to, and what happens next.
After Applying Credit
Review the customer balance and related invoice. Confirm the amount due changed as expected, reports show the adjustment, and any refund or offline payment action is recorded separately when needed.
If money was returned through a gateway or bank transfer, record that refund or payment action separately when your finance process requires it. A credit note documents the adjustment; it may not prove cash movement by itself.
After applying a credit, review finance reports for the period. Credits can affect revenue, customer balance, tax review, and collections conversations.
Troubleshooting
If the balance does not change as expected, check whether the credit note is still draft, whether it was applied to the right customer, and whether a refund or payment adjustment also needs to be recorded.
If the credit was created for the wrong customer, stop and follow your finance correction process before sending it.