Credit Note Generator
Cancels or reduces a previously issued invoice, for returns, short shipments or agreed price adjustments.
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About this document
A credit note reduces or cancels an invoice that has already been issued. It exists because invoices should not be deleted or edited after they have gone out. The correction has to be visible as its own document, so that both sides and both tax authorities can see what changed and why.
Correct with a credit note, never by amending the invoice
Once an invoice is issued it forms part of a numbered sequence that tax authorities expect to be complete and unaltered. Change the original and the buyer holds a different document from the seller. That is exactly what an audit looks for. Issuing a credit note that references the original invoice number keeps both records intact and shows the adjustment as a deliberate act.
Say what it is for
Short shipment, damaged goods, agreed discount and returned stock have different consequences for tax and for stock records. A credit note that states only an amount forces the buyer to guess how to post it. Naming the reason and referencing the original invoice line makes it possible to reconcile, which is what determines whether the buyer processes it or queries it.
Tax follows the correction
Where the original invoice charged tax, the credit note normally reverses the proportionate amount, and both parties adjust their returns for the period in which it was issued. This is why the date and the tax breakdown on a credit note matter as much as on the invoice. The correction has to land in an accounting period, and both sides need it to be the same one.
Want a blank one, in Excel or Word? Download the credit note template →
Not sure what goes in a box? How to fill out a credit note, field by field →
Keep building your document set
- Commercial InvoiceGoods, values and payment details.
- Packing List — DetailedPackages, weights and dimensions.
- Certificate of OriginThe declared origin of your goods.
- Bill of LadingShipper, consignee and cargo details.
- Shipper's Letter of InstructionInstructions for your freight forwarder.
- Verified Gross Mass DeclarationThe verified weight of a packed container.
Questions
+What is the difference between a credit note and a refund?
A credit note is a document reducing what is owed. A refund is money moving back. A credit note is often settled by offsetting the next invoice rather than by paying anything, which is why the two are not interchangeable.
+Can I cancel an invoice by issuing a credit note for the full amount?
Yes, and that is the normal way to cancel an invoice that has already been sent. Reference the original invoice number so the pair can be matched, and keep both in your records.
+Does a credit note need its own number?
Yes, from its own sequence, and it should reference the invoice it corrects. Reusing the invoice number or leaving it unnumbered makes the correction impossible to trace.
+Who issues the credit note, the buyer or the seller?
The seller, because it corrects the seller's own invoice. A buyer wanting an adjustment requests one. They cannot issue it themselves. Some trades use a buyer-issued debit note to make that request formally.