Credit Notes

When to use a credit note

A credit note reduces what a customer owes on an invoice: for a refund, a returned item or a billing correction.

Never delete a sent invoice to fix a mistake. Credit it instead, so the history shows what happened and when.

Raising a credit note

1. Go to Accounting → Credit Notes and click New Credit Note.
2. Customer: search for the company. This narrows the invoice list to that customer.
3. Invoice: choose the invoice the credit is against. This is required. The form shows how much can still be credited on it.
4. Reference: optional. Leave it blank and a number is assigned. References must be unique.
5. Amount incl. VAT (£): the amount to credit, including VAT. It cannot be more than what is still owed on the invoice. VAT is credited in the same proportion as on the invoice.
6. Reason: what is being credited and why.
7. Click Create Draft. The credit note is saved as a draft and changes nothing yet.

Admins and managers can create, issue, void and delete credit notes. Other users can view the list.

Draft, issued and void

• Draft: still being prepared. Click Delete to remove a draft raised by mistake.
• Issued: click Issue on a draft once it is final. The invoice's balance goes down by the credited amount, and the reduction in sales and VAT is posted to the ledger. An invoice credited in full is closed. An issued note can no longer be edited or deleted.
• Void: click Void on an issued note that should no longer stand. The ledger posting is reversed and the amount is owed on the invoice again. The note stays on record, marked void.

The counts above the list filter it by status. The Issued count also shows the total value of issued credit notes. The Invoice column links to the invoice each note is against.

What the customer sees

The invoice, in Plenix and in the customer portal, shows the amount Credited and the Balance due after it.

Refunds: a credit note reduces what the customer owes. If they have already paid and you are sending money back, record the refund as it leaves your bank when you reconcile.