Handle returns and credit notes

Issue a credit note for a return, an overcharge or a late discount, instead of editing a finished invoice.

When to use a credit note

  • Goods came back after you billed.
  • The invoice amount or tax was too high.
  • You give a discount after the sale and need a traceable record.

Create one

  1. Go to Sales > Credit Notes and start a new credit note. The page is titled Credit Note.
  2. Pick the customer. Under Note Details you see the Note #, the Note Date, the Mode and the Reason. If the note is linked to an invoice, the original invoice is shown. Otherwise it says Not linked.
  3. Add the lines under Items. A line needs a quantity above zero. The screen refuses a note with no lines.
  4. Check the Summary: Subtotal, Discount, Taxable, CGST, SGST or IGST, Round Off and the total. A Cash discount can be a percent or an amount.
  5. Add Notes and Terms if needed, then save. You see Saved.
Do not delete or overwrite a finished invoice to hide a mistake. A linked credit note keeps a clean audit trail. Ask your accountant how to treat tax on it.

The same screen layout is used for Debit Notes (Purchases > Debit Notes), with Supplier instead of customer.