What is a credit note, and when do you issue one?
A credit note is a document that reduces the amount a customer owes you, or gives them a credit towards a future purchase. You issue one when an invoice needs to be corrected or part of the sale is cancelled.
When to issue a credit note
- The customer returned goods.
- You made a pricing or quantity mistake on the invoice.
- You agreed a discount after sending the invoice.
- A service was not delivered, or only partly.
Why not just edit the invoice?
Once an invoice has been sent, changing it quietly causes confusion and damages your records. A credit note keeps the original invoice as it was and records the change openly, so both sides can follow what happened.
What to include
- The words Credit Note and its own number, such as CN-0001.
- The original invoice number it refers to.
- The date and customer details.
- The items or amount being credited, and the reason.
- The new balance, or whether it is a refund or credit for later.
Example
| Document | Amount |
|---|---|
| Original invoice INV-0042 | ₦120,000 |
| Credit note CN-0003 (1 item returned) | - ₦25,000 |
| New amount due | ₦95,000 |
Refund or credit?
Decide what the customer gets: money back, or a credit to use on their next order. Say which on the credit note, so there are no surprises. Keep your refund rule on your invoices, and make sure you honour it.
Make them in seconds
Aurum creates credit notes alongside invoices and receipts, linked to the original, so your records stay tidy.
Questions people ask
Is a credit note the same as a refund?
Not exactly. A credit note is the document. The refund is money going back. You can also use a credit note to give a credit towards a future order.
Does a credit note need the original invoice number?
Yes. Always refer to the invoice it corrects.
Can I issue a credit note after the customer has paid?
Yes. It then shows what you owe them, which you can refund or apply to a future order.
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