Credit Note Template
A credit note is a document a seller issues to reduce or cancel an amount already invoiced, for example after a return, an overcharge or a discount agreed later, and it must refer to the original invoice it corrects. The template below is pre-filled with a sample from Westbrook Office Supply to Maple Row Dental Practice: 3 lines, $488.00. Edit it and download the PDF.
Pre-filled credit note sample ($488.00). Example prices: replace them with your own.
From
Westbrook Office Supply
12 Market Street
Springfield, IL 62704
billing@example.com
Credit Note
Credit to
Maple Row Dental Practice
40 Station Road
Fairview, OR 97024
| Description | Qty | Rate | Amount |
|---|---|---|---|
| Returned: ergonomic office chairDamaged in transit, invoice INV-2041 line 2 | 2 each | $189.00 | $378.00 |
| Price correction: printer tonerInvoiced at list price instead of the contract price | 6 each | $12.50 | $75.00 |
| Delivery charge refunded | 1 delivery | $35.00 | $35.00 |
- Subtotal
- $488.00
- Total credit
- $488.00
Notes
Corrects invoice INV-2041 dated 3 October.
Made with Billwise - invoice-pdf-maker-app.web.app
Preview of the PDF. Everything stays in your browser: nothing is uploaded.
What is a credit note?
A credit note is a document a seller issues to reduce or cancel an amount already invoiced, for example after a return, an overcharge or a discount agreed later, and it must refer to the original invoice it corrects.
The tool prints it with the heading "Credit Note" and behaves as a credit note.
Sample credit note: Westbrook Office Supply to Maple Row Dental Practice
| Item | Qty | Rate | Amount |
|---|---|---|---|
| Returned: ergonomic office chair (Damaged in transit, invoice INV-2041 line 2) | 2 each | $189.00 | $378.00 |
| Price correction: printer toner (Invoiced at list price instead of the contract price) | 6 each | $12.50 | $75.00 |
| Delivery charge refunded | 1 delivery | $35.00 | $35.00 |
| Total credit | $488.00 |
When to use a credit note
- A customer returns goods, or part of an order, after you have invoiced them.
- You overcharged on an invoice: the wrong price, the wrong quantity or a line that should not have been there.
- You agree a discount or goodwill credit after the invoice was sent.
- An invoice must be cancelled in full and your accounting or tax rules do not allow deleting a numbered invoice.
What a credit note must include
- The heading 'Credit Note'
- A credit note number in its own sequence
- Date the credit is issued
- Number and date of the original invoice being corrected
- Seller and buyer names and addresses, with tax numbers where required
- Description, quantity and price of each credited item
- The reason for the credit
- Tax being reversed, per rate
- Total credit and how it will be settled: refund or offset against the next invoice
Credit Note vs similar documents
-
vs debit note
A debit note increases what the buyer owes, after an undercharge or an extra cost; a credit note reduces it.
-
vs tax invoice
A tax invoice records a sale and a credit note adjusts that record. Deleting or editing an issued invoice breaks the numbering trail, so the credit note is the clean correction.
-
vs payment receipt
A refund receipt shows money paid back; a credit note records the reduction in what is owed, which may then be refunded or deducted from the next invoice.
Legal and tax note
Under Article 219 of the EU VAT Directive 2006/112/EC, any document that amends an initial invoice and refers specifically and unambiguously to it is treated as an invoice, so a credit note must carry the original invoice number. Many VAT and GST systems outside the EU apply a similar rule.
General information, not legal or tax advice.
How to make a credit note
-
Open the pre-filled sample
The tool above starts as "Credit Note" from Westbrook Office Supply to Maple Row Dental Practice.
-
Replace the parties
Enter your business and your customer, plus original invoice and reason.
-
Edit the lines
Change the 3 sample lines ($488.00 in total) to your own items and prices.
-
Check the required fields
Make sure all 9 fields listed above are filled, then download the PDF.
Trades that use a credit note
Frequently asked questions
Is a credit note the same as a refund?
No. A credit note reduces the amount owed; the money can then be refunded or set against future invoices. If the customer had not paid yet, the credit simply lowers the balance due.
Do credit notes show negative amounts?
Conventions vary. Many businesses print positive amounts under a heading that makes clear the document is a credit, and the accounting system records them as negative. What matters is that it says it is a credit and names the original invoice.
Can I delete the wrong invoice instead?
Once an invoice has been sent, most tax systems expect it to stay in your records under its number. Issue a credit note for the full amount, then a new, correct invoice.
Does a credit note need its own number?
Yes. Number credit notes in their own sequence (the tool uses the CN- prefix) so each one can be traced, and quote the invoice number on every credit note.