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Create credit note - quick start guide

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How to create a sales credit note in Sage Accounting.


For more information about adding details to credit notes, such as discounts, Ledger accounts, and VAT, see Add more detail to a credit note.

How this works

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 the invoices later
    Use this when are giving your customer credit to use against future invoices or the credit note is being used to pay more than one invoice

Once saved, match the credit note to the invoice or invoices that it's paying.

Credit notes for stock items

If you are using stock items, we create a stock movement transaction whenever stock is bought and sold.

Whenever stock items are included on a credit note, we create a Negative Goods Out stock movement transaction. This increases your stock level as goods have been returned.

Credit a single sales invoice

  1. From Sales, select Sales invoices.
  2. Open the invoice you want to credit.
  3. Select Add Credit Note from the panel on the right. We create a credit note with the same details as the original invoice.
  4. Change the details as necessary. When you change the price, we automatically update the VAT and Total.
    The total value of the credit note cannot be more than the original invoice.
  5. If this is a draft credit note, select the Save as draft check box. When you're ready to save this and update your accounts, clear this check box.
  6. If you want to attach a file, for example, a copy of the credit note the supplier sent you, select the attachment button. Read more about adding attachments.

The invoice now shows as Paid or Part-paid.

Save a credit note and match to invoices later

  1. From Sales, select Sales credit notes, then New Credit Note.
  2. Enter the customer, date, and reference.
  3. Enter the details of the items being credited. 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 whether this item is for goods and related services or a stand-alone service in EU Goods/Services.
  5. If required, enter any notes.
  6. To attach a file, select the attachment option. Read more about adding attachments.
  7. If you want to come back and update the credit later, choose Save as draft.

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