A credit note is a seller-issued document that reduces an amount previously invoiced, commonly because of a return, overcharge, discount, cancellation, or billing correction. It provides an audit trail without deleting or silently altering the original invoice.
Quick reference for Credit note
| Check | What it means for the transaction |
|---|---|
| Category | Orders, invoicing, accounts payable and accounts receivable |
| Record to keep | Link the order, delivery evidence, invoice, approval, adjustment and payment reference that belong to the same transaction. |
| Do not infer | An approved invoice or recorded payment does not by itself prove that funds have settled or that the open balance is reconciled. |
Credit note and nearby terms
- Invoice: An invoice is a document a seller issues to request payment for supplied goods or services.
- Debit note: A debit note records an amount that one party says should be added to or deducted from an existing account, depending on the accounting and commercial context.
- Payment reconciliation: Payment reconciliation matches money sent or received with invoices, bank or payment-provider records, fees, exchange differences, and accounting entries.
