Issue a credit note

A credit note lowers what a customer owes you. Use it for returns, a discount agreed after invoicing, or a mistake on an invoice that has already been sent.

Create a credit note from an invoice

1. Open the invoice. It must be sent, not a draft or void.
2. Open More and choose Create Credit Note.
3. The new credit note opens with the customer, lines and amounts copied from the invoice, today's date, and the invoice number in Reference#. Check them, then lower the Quantity or Rate to credit only part of the invoice.
4. Add a Subject that tells the customer what the credit is for.
5. Choose Save as Open to issue it, or Save as Draft to finish later.

You can also open Credit Notes and choose + New to start from scratch.

Use the credit

An open credit note keeps a balance. Open it and choose:

• Apply to Invoices. Enter the amount to credit against each of the customer's open invoices, then choose Save.
• Refund. Enter the Amount, Refunded On, Payment Mode and From Account, then choose Save.

The credit note shows Credits Remaining until it is used up.

When not to use a credit note

• To cancel an invoice completely, open More and choose Void. It stays in your records with a zero balance.
• To give up on an amount that will never be paid, Write Off on the invoice's More menu records the remaining balance as bad debt. Ask your accountant which fits your case.
• A draft invoice can simply be edited or deleted.

Related: Record a payment.