How to use the credit note generator
- Enter the credit note number, the date, and the invoice being credited. Add the invoice date and, if you know it, the invoice total, so the note can show the balance after the credit.
- Choose the reason and fill in who the note is from and who it is for.
- List the items credited: a description, a quantity and a unit price for each. If tax was charged on those items, enter the same tax rate.
- Check the totals in the box above the preview, then press Download PDF or Print. Copy totals puts the figures on your clipboard.
Crediting a returned item
A customer returns one item that was billed at $50.00 on invoice INV-101. Enter one line, a quantity of 1 at $50.00, and the credit note shows a total credit of $50.00 against INV-101. If the invoice total was $250.00, the note also shows a balance due after credit of $200.00.
With a larger credit than the invoice, such as $50.00 against a $40.00 invoice, the note says there is $10.00 of credit left for the customer. With tax, the note credits the same percent: 3 items at $19.99 and 2.5 hours at $8.40 come to $80.97, and a 7.5% tax rate adds $6.07 for a total credit of $87.04.
What a credit note is for
A credit note reduces what a customer owes after an invoice has been issued. It is used for returned goods, a price correction, a service that fell short, a discount agreed afterward or a cancelled order. Rather than editing the original invoice, a separate note keeps a clear record of what changed and why.
Good credit notes name the invoice they adjust, give the reason in a few words, list what is credited and show the amounts with any tax. This tool puts those elements in a standard layout so the customer can match it with their own records. The invoice generator makes the original document, and the statement of account generator can show the credit as part of a running balance.
How the amounts are worked out
Each line is the quantity times the unit price, rounded to the cent with halves rounded up. The subtotal is the sum of the lines, the tax is the subtotal times the rate you enter, rounded the same way, and the total credit is the two added together. All arithmetic is done in whole cents, so the totals match the lines exactly.
The tax rate is whatever you type. Nothing is built in, because tax rules depend on where you are and what you sell. Leave it empty for no tax. Your records and local rules decide how a credit should be reported, and this template does not give tax or legal advice.
Privacy
The credit note is built in your browser. Nothing you type is uploaded. If you tick the box to remember your entries, they are kept in this browser only, and unticking it deletes them.
Assumptions and limits
- Amounts are in dollars and cents, quantities may have up to three decimals, and each line is rounded half up to the cent.
- The tax rate is the one you enter and is applied to the credit subtotal. No tax rules are built in.
- The balance after credit is the invoice total you enter minus this credit. It does not include other payments or credits.
- The sample names, numbers and amounts are examples to replace.
Frequently asked questions
What is the difference between a credit note and a refund?
A credit note lowers what the customer owes or leaves a credit on their account. A refund pays money back. A business may issue a credit note and then refund it, or let the customer use it on a later invoice.
Does a credit note need to match the original invoice?
It should name the invoice and credit the same items and tax rate that were charged, so the two documents reconcile. This tool asks for the invoice number and a tax rate for that reason.
Can I credit part of an invoice?
Yes. List only the items or amounts being credited. For a partial credit on one line, change the quantity or enter the credit as its own line, such as a price correction.
What happens if the credit is larger than the invoice?
If you enter the invoice total and the credit is larger, the note shows the credit left for the customer instead of a balance due.