There are two ways to create credit notes:

• Credit a single invoice - Use this to cancel an invoice or when the credit note exactly matches a single invoice
• Create the credit note and match it to invoices later - Use this when giving your customer credit to use against future invoices. Or, if you use the credit note to pay more than one invoice. Once saved, match the credit note to the relevant invoice/s

Credit notes for stock items

If you're using stock items, we create a stock movement transaction whenever you buy or sell stock.

Whenever you include stock items on a sales credit note, we create a Negative Goods Out stock movement. This increases your stock level as goods have returned.

Credit a single sales invoice

1. Go to Sales, then select Sales invoices.
2. Open the invoice you want to credit.
3. Select Add credit note from the panel on the right.
   
   TIP:

   We create a credit note with the same details as the original invoice.

4. Change the details as required. When you change the price, we automatically update the VAT and Total.
   
   NOTE:

   The total value of the credit note can’t be more than the original invoice.

5. If this is a draft credit note, select the Save as draft checkbox. You can return to the credit note later when you’re ready to update the ledgers and clear this checkbox.
6. If required, enter any notes.
7. If you want to attach a file, select the attachment button. For more information, follow our article on how to add attachments.
8. When you've finished, select Save.

The invoice now shows as Paid or Part-paid.

Save a credit note and match to invoices later

1. Go to Sales, select Sales credit notes, then select New Credit Note.
2. Enter the customer, date and reference.
3. Enter the details of the items you're crediting. Enter each item on a separate line. Make sure you include the description, ledger account, price and VAT rate.
4. If the credit note is for goods or services purchased from a VAT-registered supplier in the EU, choose from Product / Service.
5. If required, enter any notes.
6. If you want to come back and update the credit note later, choose Save as draft.
7. If you want to attach a file, select the attachment button. For more information, follow our article on how to add attachments.
8. When you've finished, select Save.

Once saved you can allocate the credit note to an invoice later. Follow our article on how to allocate a standalone credit note to an invoice.

• Allocating existing transactions
• Edit a sales credit note