Credit note template
When goods come back or an invoice was overcharged, you issue a credit note rather than editing the original invoice. This template records the original invoice number and date and the reason, and totals the credit including tax.
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What this template includes
- Your business name, address and contact details
- Customer name and address
- Document number and issue date
- Original invoice #
- Original invoice date
- Reason for credit
- Line items with qty, price and amount
- Tax, discounts, amount paid and balance due
Why not just edit the invoice?
Once an invoice has been sent and recorded, changing it breaks the audit trail and, in VAT and GST countries, the tax records of both sides. A credit note reduces what is owed and leaves the original intact.
Credit or refund
A credit note can be used against the next invoice or paid out as a refund. Say which one in the notes, so the customer knows whether to expect money back. For a partial credit, list only the returned or corrected items and quantities, not the whole original invoice.
Questions
What must a credit note show?
At minimum a credit note number, date, the original invoice it relates to, the reason, and the amounts and tax being credited. VAT and GST credit notes also need the tax registration numbers.
Does a credit note need its own numbering?
Yes. Use a separate sequence such as CN-0001. The tool starts credit notes with the CN prefix and increments it when you choose "Next number".
Is a credit memo the same thing?
Yes. Credit memo is the more common term in the US and credit note elsewhere. The document does the same job.