Credit notes, also known as credit memos, are documents issued by a seller to a buyer, reducing the amount the buyer owes to the seller under the terms of an earlier invoice.

Credit Notes are generally used in, but not limited to, the following scenarios:

  • Returned Goods: The buyer has returned goods to the seller due to damage, defect, or other reasons.
  • Overbilling: There was an error in the original invoice, such as overbilling or incorrect pricing.
  • Discounts or Rebates: The seller wants to offer a discount or rebate after the initial invoice was issued.
  • Promotional Credits: Credits given for promotional purposes or customer satisfaction.

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Creating Credit Notes

To create a credit note,

  • Go to Invoices and select the invoice you want to add credits to
  • Click on Actions > Issue Credit Note

  • Fill in the following fields:

    • Effective Date (required): Between the date the invoice was created and the current date
    • Internal Reason (required): Capture the reason for creating this credit note
    • Memo (optional): A text note visible to your customer on the invoice
    • Internal Note (optional): A text note for internal purposes that is NOT visible to the customer

  • Select the Invoice Line Item(s) you want to issue credits for

  • Enter the amount you want to credit in the “Creditable” field

  • To confirm, click on “Issue Credit Note”

Once created, you can find the Credit Note displayed on the invoice

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Credit Notes for Paid Invoices

If an invoice has already been paid, you can choose one of more of the following options

  • Issuing a refund for the paid amount
  • Crediting the customer’s account
  • Attaching the full amount of a pre-existing refund from the customer’s account

Previously issued refunds for an invoice can be selected in the “Select how to credit…” dropdown.

Only payments made through Stripe can be refunded

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Updating Credit Notes

You can update the Internal Reason, Memo (external), and Internal Note attached to a credit note. To update a credit note

  • Go to the Credit Note
  • Click on Actions > Edit
  • Update the necessary fields and click Update

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Customer Email for Credit Note

When a credit note is issued, the customer receives an email notification with the Invoice # and the amount credited.