Credit Note

Last updated: June 20, 2026

e-Invoice training
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A credit note reduces what a customer owes you, for a return, a discount or rebate, or an adjustment, while leaving the original invoice untouched. It is the sales-side mirror of the purchase debit note, and the correct way to give value back to a customer without rewriting a posted document.

What you will learn
  • When to use a credit note
  • What the purpose setting does
  • How it posts, and why stock is separate
  • How a refund is tracked

How it behaves

Purpose drives the posting

A credit note carries a purpose that sets how it posts: Return Refund (the customer returned goods), Discount Refund (a price reduction or rebate after the fact), or Adjustment (a general correction). The same document covers all three, with the purpose deciding the accounting.

It reverses receivables, not stock

Posting a credit note creates the entries that reduce the customer's receivable and reverse the sale, while the original invoice stays exactly as issued. Cancelling the credit note reverses those entries in turn. It runs Draft, Verification, an optional e-Invoice acceptance stage, Posted, then Cancelled, exactly like the invoice.

Important: money and goods are separate. A credit note handles the money (the receivable). It does not by itself bring returned goods back into stock. Where physical goods come back, that is a separate delivery return, so a genuine return is two coordinated documents: the return brings the stock in, the credit note credits the customer.

Refund tracking

A credit note tracks how it is settled through a payment status of pending, partial or complete: its value can be refunded to the customer, or offset against what they owe on other invoices, and the balance falls as it is used.

Worked example

A customer is overcharged on a posted invoice. You raise a credit note with purpose Adjustment for the difference; posting it reduces their receivable, and you either refund it or let it offset their next invoice, all while the original invoice stands unchanged for the record.

Edge cases and good practice

  • Never edit a posted invoice; correct it with a credit note.
  • Pair a return with a credit note: the return for the goods, the credit note for the money.
  • Choose the purpose so the entries land in the right place.

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