Credit note template
What is a Credit Note?
A Credit Note is a document issued by a seller to a buyer to correct an error in an invoice, refund part or all of a payment, or provide a discount after the original invoice has been issued. It acts as a reverse invoice, allowing businesses to adjust their sales and tax records. Credit notes are commonly used for returns, overpayments, or when goods or services delivered were not as expected.
What must a Credit Note contain?
Basic Elements:
Document title: "Credit Note"
Credit Note number: A unique sequential number for the credit note.
Original invoice reference: The invoice number to which the credit note applies.
Date of issue: The date the credit note is issued.
Seller details: Business name or personal name, address, VAT registration number (if applicable).
Buyer details: Business name or personal name, address, VAT registration number (if applicable).
Description of goods or services:, Description of the returned items or services, quantity or value of goods/services being adjusted, unit price (excluding VAT), total value being credited.
VAT information (if applicable)
Total amount of the credit note: The total value to be credited (including VAT if applicable).
Advanced Elements:
Reason for credit note: A brief explanation for issuing the credit note, such as "Return of goods," "Overpayment," or "Discount adjustment."
When is a Credit Note issued?
A Credit Note is typically issued when:
Goods are returned: The buyer returns products that were faulty, not as described, or unwanted.
Overpayment occurs: If the buyer accidentally overpays, a credit note is issued to correct the balance.
Invoice errors: If the seller realizes an error in the original invoice, such as an incorrect price or quantity, a credit note corrects the mistake.
Discounts or rebates: If a discount or rebate is applied after the original invoice, a credit note is issued to reflect the change in price.
