Correct an invoice you already sent with a credit note, also called a credit memo: the original invoice, the reason, what is credited and the total, plus whether it is refunded or taken off the next bill. Fill it in online and download PDF, Word or Excel. Free, no sign-up.
CREDIT TOAna RuizHarbor & Pine Café1205 S Congress Ave, Austin, TX 78704orders@harborpine.com
PROJECTCredit against invoice INV-2207Damaged case returned and lids re-priced.
DESCRIPTIONQTYRATEAMOUNT
12 oz paper hot cups, returnedSKU HC-12, 1 case damaged in transit
1 case62.0062.00
Lid price correctionSKU LD-1220, billed at $42, agreed price $38
4 case4.0016.00
CREDIT DETAILSCredit for invoice: INV-2207Reason: Damaged goods returned; lids billed at the wrong priceRefund method: Taken off your next invoice
Subtotal$78.00
Total credit$78.00
TERMSThis credit note reduces the amount owed on the invoice shown. It will be refunded or taken off your next invoice, as stated above.
Thank you for your business.Sorry for the trouble with this delivery. Questions? Call accounts on (512) 555-0131.
Sample credit note for a damaged case and an overcharge. Yours will show your business and customer.
What is a credit note?
A credit note, or credit memo, is a document a seller issues to reduce or cancel the amount a customer owes on an invoice that has already been sent. You use one when goods come back or arrive damaged, when you overcharged, when you agree a discount after billing, or when a job is cancelled. Instead of editing or deleting the original invoice, which would break your records, you issue a credit note that refers to it. The customer then gets a refund, or uses the credit against a future invoice.
The customer returned goods, or they arrived damaged or faulty
You charged the wrong price, quantity or tax rate
You agreed a discount or goodwill gesture after the invoice went out
A job, booking or subscription was cancelled after being invoiced
The invoice was sent in error and needs cancelling in full
What to include on a credit note
The words Credit note (or Credit memo) and a unique credit note number
The credit note date
Your business details and the customer's details, as on the invoice
The original invoice number and date
Each item credited, with quantity, price and amount
Any sales tax or VAT credited, and the total credit
The reason, and whether the credit is refunded or applied to a future invoice
How to write a credit note
Open the credit note maker. Your business details carry over from your invoices, so the credit note matches the invoice it corrects.
Give it its own number. Credit notes have their own series, such as CN-0042. Don't reuse the invoice number.
Link the original invoice. Enter the customer, the invoice number and the invoice date, so both sides can match them.
List what is credited. One line per returned item, overcharge or cancelled service, with quantity and price. Credit the tax at the same rate as the invoice.
Give the reason and how it is settled. Say why (returned, damaged, overcharged, cancelled) and whether you refund the money or take it off the next invoice.
Send it and update your books. Download PDF, Word or Excel and email it to the customer. Record it against the invoice so the balance is right.
Credit note example
The sample above is Lone Star Restaurant Supply's credit note CN-0042 to Harbor & Pine Café, against invoice INV-2207: damaged goods returned; lids billed at the wrong price. The credit is taken off your next invoice.
Credited
Qty × price
Credit
12 oz paper hot cups, returnedSKU HC-12, 1 case damaged in transit
1 case × $62.00
$62.00
Lid price correctionSKU LD-1220, billed at $42, agreed price $38
4 case × $4.00
$16.00
Total credit
$78.00
Credit note template in Excel, Word or PDF
Prefer a file you fill in yourself? Each one downloads blank, in any of the eight designs:
Need to show everything a customer owes after credits and payments? Send a billing statement. Sending the goods? Put a packing slip in the box. Starting a new sale? Make an invoice.
Questions about credit notes
What is a credit note?+
A credit note is a document a seller sends to reduce or cancel the amount a customer owes on an invoice. It is used for returned or damaged goods, overcharges, discounts agreed after billing and cancelled work, and it quotes the original invoice number.
What is the difference between a credit note and a credit memo?+
There is none in practice. Credit memo (credit memorandum) is the common US name; credit note is used in the UK, Canada, Australia, India and most other countries. Both reduce what the customer owes on an invoice.
What should a credit note include?+
The words Credit note, a unique credit note number, the date, your business and the customer's details, the original invoice number and date, each item credited with quantity and price, any tax credited, the total credit, the reason and how it will be settled.
Is a credit note a refund?+
Not by itself. A credit note records that the customer owes less. You then either refund the money or let the customer use the credit against a future invoice. Say which on the credit note.
Do I need to include tax on a credit note?+
If the original invoice charged sales tax or VAT, credit the tax on the credited amount at the same rate, so your tax records stay correct. For VAT in the UK, show the VAT credited and your VAT number.
What is a debit note?+
The opposite of a credit note. A buyer sends a debit note to ask for a credit (for example when returning goods), or a seller uses one to increase what a customer owes. The seller usually answers a debit note with a credit note.
Ready to issue a credit note?
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