What is a credit note and how do you write one?
Invoices don’t always come out right. Learn how to make a credit note to give customers a refund on part of an invoice after it has already been sent.
What is a credit note?
Errors and changes happen. It’s not uncommon to send a customer an invoice only to realize you overcharged them for certain supplies or services. Instead of voiding the original and writing a new invoice — which could confuse and mess up accounting processes — you can issue a credit note to adjust the totals.
Credit notes are negative invoices designed to give a refund on part of an invoice. They’re an extension of the original to correct any errors. Think of them like a “P.S.” for your invoices.
Information to include.
Learning how to write a credit note isn’t much different than learning how to write an invoice. They both contain basically the same information. The only difference is that the credit note should include a reference to the original invoice.
Here’s the essential information to include on all credit notes:
- The words “credit note” at the top
- Customer information
- Your business information
- Date issued
- Credit note number
- Original invoice reference number
- Item descriptions, quantities, and prices
- Total amount credited
Because you’re giving money back to the customer, many businesses require a signature on credit notes for authorization and approval. Customers don’t like to wait when it comes to resolving overcharged invoices, so use an e-signature software like Acrobat Sign to speed up the process.
When you use an e-signature, you can approve and authorize credit notes without fighting with printers, scanners, or fax machines. Simply add your legal signature with a click of your mouse and send the credit to the customer.