What is a credit note?
A credit note (also called a credit memo) reduces the amount a customer owes you. Instead of editing or deleting an invoice you’ve already sent, which can cause problems with your records and tax filings, you issue a credit note that cancels all or part of it.
When to issue a credit note
- The customer returned goods
- You overcharged or made a pricing mistake
- The goods arrived damaged or the service fell short and you agreed a partial refund
- You’re cancelling an invoice entirely
How to fill in a credit note
- Give it its own number. Many businesses use a separate sequence such as CN-001.
- Reference the original invoice number. The “PO Number” field can be relabelled “Original Invoice”.
- List the items or amounts being credited and the reason for each.
- Include the same tax rate as the original invoice so the tax is reversed correctly.
- In Notes, say whether the credit will be refunded or applied to a future invoice.
Frequently asked questions
Should I delete the original invoice instead?
No. Keep the original invoice and issue a credit note against it. This keeps your numbering sequence and audit trail intact.
Is a credit note the same as a refund?
Not quite. A credit note records that the customer owes less. You can then refund the money or let them use the credit against a future invoice.
Is it really free?
Yes. You can create and download as many documents as you like without paying and without creating an account.
Where is my data stored?
Everything you type stays in your own browser. Drafts and your history are saved locally on this device, so nothing is uploaded to our servers.