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.