Credit invoice
A credit invoice (also known as a credit note) is a document that records a refund or credit applied to an invoice. For instance, you might issue a credit invoice if a customer requests a refund or if you decide to grant a credit for any reason. When a credit invoice is issued, the software automatically updates the client’s account, adjusts your accounts receivable, and modifies your sales tax records accordingly.
More specifically, credit invoices are commonly issued in the following situations:
- When the original invoice amount is incorrect and needs correction before payment (for example, if the total was £800 but should have been £80, you can issue a credit invoice for £720).
- When a customer has requested a refund after payment.
- When a customer has partially paid an invoice but wants to pay less than the full amount (for example, if something didn’t meet their expectations or they disagree with the VAT amount).
- When a customer requests a discount after an incorrect amount has been invoiced. For example, after issuing a credit invoice to correct the amount to £80, the customer requests 25% off for poor service. A refund of £20 would then be issued.
- Basically, any significant change to the invoice amount requires issuing a credit invoice (credit note).
A credit invoice is created similarly to a regular invoice, with one key difference: all amounts are negative.
There are two ways to create a credit invoice:
- By clicking the "credit invoice" button to add partial refunds or a complete invoice manually.
- By right-clicking an existing invoice to open a hidden menu and selecting Convert to Credit Invoice, which automatically converts positive amounts to negative and displays them on the credit invoice.
Credit invoice settings
In the configuration settings, you can customize the text displayed on credit invoices. You can also set the numbering format and add messages that will appear exclusively on credit invoices.
Credit invoice numbering
The numbering formats for credit invoices are the same as those used for regular invoices.
Credit invoice numbering can be linked to regular invoice numbering. This option ensures credit invoices follow the same numbering sequence as regular invoices.