Credit Notes

Use Sales > Credit Notes to record customer credit and apply it to an invoice. A credit note does not receive returned items or pay money to the customer.

Find a credit note

1. Open Sales > Credit Notes.
2. If necessary, select a status in Filter by credit note status.
3. Find the credit note in the list.
4. Select its row to examine its lines, total, and remaining credit.

Create a credit note

1. Select New credit note.
2. In Source, select Invoice or Sales return, if applicable.
3. For a credit without a source document, select Customer.
4. Set Issue date.
5. Examine the displayed Currency.
6. Enter Reason, if necessary.
7. In Credit lines, examine or enter Description, Qty, and Unit price.
8. Remove copied lines that do not need a credit.
9. To enter another line, select Add line.
10. Enter Tax amount, if applicable.
11. Do a check of the total.
12. Select Save draft.

An invoice source copies invoice quantities and prices. A return source copies return quantities. Return lines without a known invoice price can start at zero. Enter the correct credit prices.

Each quantity must be greater than zero. Unit prices and tax cannot be negative. The credit total must be greater than zero.

You can also start from Create credit note on an issued invoice or an eligible sales return.

Issue a credit note

1. Open the draft.
2. Examine the customer, source, currency, quantities, prices, and tax.
3. Select Save and issue.

You can also select Issue in the draft's row actions. The status changes to Issued. Issuing creates available credit. It does not apply the credit to an invoice.

Apply credit to an invoice

Applying credit reduces the selected invoice's outstanding balance and the credit note's remaining amount.

1. Select Apply for an issued credit note with remaining credit.
2. In Invoice, select the invoice.
3. Set Applied on.
4. Enter Amount.
5. Enter Notes, if necessary.
6. Select Apply credit.
7. Examine the application history and remaining credit.
8. Open the invoice to examine its updated balance.

The invoice must belong to the same customer and use the same currency. The invoice must be issued and have an outstanding balance. The amount cannot be more than the remaining credit or the invoice balance.

A partial application leaves the note Partially applied. You can apply the remaining credit to another eligible invoice.

Correct an unused credit note

To change a draft, open its action menu and select Edit. Save the corrected draft.

To discard an unused draft or issued note, select Void. The void action is unavailable after any credit has been applied. Applied credit does not have a reversal action in this view.