A credit note records value owed back to a customer — returns, overcharges, goodwill. It can be applied against invoices or refunded in cash.
#Creating a credit note
Sales → Credit Notes → New credit note:
- Customer *, Credit note number, Date *, Reference.
- Credit against invoice — pick one of the customer's sent invoices and the lines are pre-filled and linked. Adjust line quantities for partial returns.
- Items returned to stock — switch on when goods physically came back. The items re-enter inventory at the cost they originally left at (the matched cost lot), not at the credit-note price, so margins stay honest.
- Open immediately — on posts the credit straight away; off keeps it as a draft.
- Line items, Adjustment, Note, Terms & conditions.
Click Create credit note.
#Statuses and actions
Draft → Open (posted; Remaining shows the unused value) → Closed (fully applied or refunded). Cancelled credit notes stay for the audit trail.
Buttons: Apply to invoices, Refund (both while credit remains), Send Mail, PDF, Edit Credit Note (draft), Delete (draft) or Cancel (open — posts a reversing entry; confirm Cancel this credit note?). ⋯ menu: Mark as open, Download PDF. Tabs: Overview, Journal Entries, Applied invoices, Refunds.
#Applying a credit to invoices
- Click Apply to invoices. The dialog lists the customer's open invoices with due amounts.
- Enter Amount to apply per invoice (capped at that invoice's balance and at the remaining credit). Total to apply and Remaining after apply update as you type.
- Click Apply credits. The invoices' balances fall; the Applied invoices tab lists each application, with a bin icon to Remove one.
#Refunding a credit
- Click Refund. Enter Date, Amount (pre-filled with the remaining credit), From account (the bank or cash account paying it), Reference # and Description.
- Click Save refund. It appears on the Refunds tab and reduces the remaining credit.