Credit Note

A credit note is a document which issues a refund against an invoice - it essentially reverses all or part of an already issued invoice (at the point a credit note is issued an invoice will not usually have been paid). It is a primary document.

It is important to note that if you ever need to amend an invoice the correct way to go about this is to issue a credit note rather than changing the original invoice as this provides full transparency and an audit trail as to what happened.

Common Reasons to Issue a Refund

• Goods arriving damaged
• Goods got lost on route
• Faulty goods
• Not all the goods may have been sent (this is known as shortages)
• Invoice amount incorrect so customer overcharged

Look Out For

• Invoice number of the invoice being reduced as a result of the credit note.
• The reason for the credit note.
• All other details are the same as for an invoice - the documents are almost identical in reality.