Credit Notes
Partially or fully reverse an invoice.
A credit note reduces what a customer owes. Use one when you need to refund, correct a mistake, or agree a discount after the invoice has already gone out.
Navigate to Sales → Credit Notes.
A credit note is the right way to correct an issued invoice. Editing or deleting the original rewrites history and breaks the audit trail; a credit note sits alongside it and shows plainly what changed and why.
Creating a Credit Note
Click New Credit Note and fill in:
- Invoice — the invoice being credited. The customer and currency carry across from it.
- Line items — which items are being credited and how much of each. A credit note can be for part of an invoice or all of it.
- Reason — a required note explaining the credit.
Save it as a Draft, then approve it.
Credit Note Statuses
| Status | Meaning |
|---|---|
| Draft | Created, not yet approved. Editable. |
| Approved | Finalised. Ready to apply or refund. |
| Applied | Fully applied against the invoice's balance. |
| Partially applied | Some of it applied; the rest is still outstanding. |
| Refunded | The money was returned to the customer. |
| Void | Voided. Has no effect. |
Applying and Refunding
An approved credit note can be dealt with in two ways:
- Apply it to the original invoice. This reduces the invoice's outstanding balance. Applying more credit than the balance allows leaves the credit note partially applied.
- Refund it. Record that the money went back to the customer.
A credit note needs approval before it can do either — an unapproved draft is inert.
Voiding and Deleting
- Void marks the credit note as void so it stops having any effect, while keeping it on the record.
- Delete removes it entirely, and is only available on a draft.
Credit Notes and the Ledger
Because an invoice is posted to the ledger when it is sent, approving a credit note writes the corresponding reversing entry. Voiding reverses that too, so the ledger always agrees with what the screen shows.