Before you start

An issued invoice can't be changed. You can void it, even when it's paid, or, if you'd rather keep it on record, give the customer a credit note. A credit note is a short document with its own number, like CN-0001, and a reason. It lowers what the invoice says is owed. The invoice itself stays as it was issued.

Issue a credit note

  1. Open the invoice in Money, then Invoices. Choose More, then Issue credit note. It's in the same menu as Void invoice, and shows while there's anything left to credit.
  2. Choose Credit: Some of the lines, or An amount. For lines, tick each line and change the amount if you're taking back only part of it. For an amount, type it with VAT included.
  3. Say why, in a few words. The customer sees it.
  4. Check the total, and what's then owed, and choose Issue credit note.
  5. To tell the customer, choose Send to customer on the credit note, under Credit notes on the invoice. It goes by email with a PDF, and they can open it in their portal.

VAT

If the invoice charged VAT, the credit note takes back VAT at the same rate, line by line, and its PDF says Tax credit note. If you aren't VAT registered, there is no VAT on it. In your VAT return, a credit note comes off on the day you issued it.

What happens next

  • What's owed on the invoice goes down by the credit. If that's all of it, the invoice shows Paid, or Credited if the whole invoice was taken back. Arrears, reminders and the customer's balance follow.
  • Credit notes appear on the customer's statement, on their Money tab, and in their portal.
  • If the customer had already paid more than the invoice now needs, the extra stays as credit on their account. It shows as In credit on their balance. To give it back as money, use the refund on the payment: see Refunds and payment mistakes.
  • A Direct Debit already on its way isn't changed. Cancel it first if the customer should now pay less.
  • A credit note can't be edited or deleted. If you credited too much, tell the customer and issue a new invoice for the difference.
  • An invoice with a credit note can't be voided.

If something goes wrong

  • “That is more than is left to credit on this invoice”: you can credit up to the invoice's total in all, across every credit note.
  • “Give a reason, up to 300 characters”: write why, in a few words.
  • No Issue credit note under More: the invoice is a draft or void, or it has been credited in full. A draft can simply be edited.
  • “This customer has no email address.”: add one on their page, then send again. You can still download the PDF.

Who can do this

The owner and managers with Money issue and send credit notes. Anyone with Money, and accountants, can see them. Customers see their own.

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