How to create a credit note

Invoiceplace now provides a simple way to create credits notes (or credit memos). Now you can issue refunds and other forms of credit to your customers.

What is a credit note / memo?

A credit note is essentially a ‘negative invoice’, typically used in these scenarios:

  • Your customer returns faulty or unwanted goods
  • The amount is reduced for an invoice your customer has already received
  • You provide credit to your customer for another reason.

When you issue a credit note no money changes hands. Your customer will now have a credit added to their account, which can be used as a discount on future invoices.

An example credit note which can be used a template is available here:

How to create a credit note

1. Create an invoice.

If you are issuing a credit for goods returned save time by copying the original invoice. Only keep the line items for the returned goods.

2. Enter negative quantities to create a credit note from an invoice

Change the quantity for goods returned to a negative number. If 4 electrical switches were returned enter -4.

If a credit memo is created to reduce the amount of an already issued invoice use a unit type of ‘Each’ and a negative quantity. For example to provide a credit of $100 enter a quantity of -1, unit type of ‘Each’ and amount of 100.

3. Print or email

Print a credit note or email it directly to your customer as a professionally formatted PDF or Word attachment.

How does a Credit Note affect inventory?

When a credit note is issued for returned products the stock on hand will increase. If a customer is issued a credit but no goods are returned ensure a product is not selected.

Credit notes and customer account balances

Issuing a credit memo will decrease the balance that your customer owes you. In the example below a new customer has an zero balance.

If you issue a credit note of -$50 to this customer their balance is now -$50.

Now Invoiceplace provides the flexibility to issue credit notes. Manage customer returns, adjustments to already issued invoices and credits for any other reason. Take control of managing your business and upgrade to Invoiceplace for easy online invoicing and quotes from anywhere!

Try Invoiceplace today – Easy Invoicing And Quotes From Anywhere. Sign up for free, click here to start.

Use online invoicing to keep track of overdue invoices

When you run your own business keeping track of overdue invoices is painful, even more so when you operate more than one business.

Invoiceplace takes away the pain by providing a simple online invoicing service that tells you when customer have overdue invoices. With a Premium account you can manage up to three businesses. See straight away the total overdue and due invoices, and email a statement to act as payment reminder.

There is no need to worry about keeping track of customer accounts, let Invoiceplace take care of your billing so you can focus on growing your business.

Try Invoiceplace today – Easy Invoicing And Quotes From Anywhere. Sign up for free, click here to start.

Inventory basics for small businesses

How does inventory affect profit and loss statements, and cash flow? Find out here.