Credit Invoice (Credit Note)

- Purpose
 

A Credit Invoice, also known as a Credit Note, is an official financial document used to reduce, reverse, or refund all or part of a previously issued invoice.
 

It is issued when:
 

• A customer returns goods

• A service was canceled or not fully delivered

• An overcharge occurred

• A pricing or tax correction is required

• A refund or account adjustment is needed

A Credit Invoice does not request payment — instead, it returns value to the customer or adjusts their balance.



 

- When to Use a Credit Invoice
 

Use a Credit Invoice when:
 

• Products are returned or exchanged

• Services are partially or fully canceled

• Invoice amounts need correction

• Tax amounts were miscalculated

• Customer credit must be recorded formally
  
  
   

  - How to Use – Step-by-Step (User Flow)
   

  1️⃣ Open Credit Invoice Module
   

• Navigate to Documents → Credit Invoices

• Click Add Credit Invoice
  
   

  2️⃣ Select Original Invoice
   

• Choose the invoice being corrected or refunded

• System loads:
   

  • Original items

  • Prices

  • Tax details

  • Customer information
    
    
     

    3️⃣ Define Credit Amount
     

  • Choose items to refund or

  • Enter a custom credit amount

  • Credit can be:

    • Partial

    • Full

  • Tax and discount adjustments are applied automatically
    
    
     

    4️⃣ Review & Save Credit Invoice
     

  • System generates a Credit Invoice number

  • Document amount is stored as negative value

  • Credit Invoice is linked to the original invoice
    
    
     

    5️⃣ PDF Generation
     

  • Official Credit Invoice PDF is created

  • Clearly marked as Credit Invoice / Credit Note
     

  • Includes:

    • Original invoice reference

    • Refunded items or amount

    • Tax reversal details
      
      
      
       

    • 6️⃣ Send to Customer
       

    • Send Credit Invoice via:

      • Email

      • WhatsApp (if enabled)

    • Customer receives confirmation of credit
      
      
       

      Balance Adjustment
       

    • Credit amount is:
       

      • Applied to customer account balance or

      • Offset against unpaid invoices or

      • Recorded for refund processing
        
        
         

        Refund Handling
         

      • If refund is required:

        • Payment gateway refund handled separately

        • Credit Invoice acts as financial proof
           

      • System tracks:

        • Refund amount

        • Related invoice

        • Adjustment history
          
          
           

          -  Relationship with Other Documents
           

          Credit Invoices are directly linked to:
           

        • Original Tax Invoice

        • Receipts (if refund is processed)

        • This creates a complete audit trail.
          
          
           

          -  API Support – Automation & Integration
           

          Credit Invoices are fully supported via API.
           

          API Capabilities
           

        • Create Credit Invoice via API

        • Link Credit Invoice to original invoice

        • Apply partial or full credit

        • Retrieve Credit Invoice details

        • Fetch PDF URL

        • Update customer balance automatically
          
          
          
           

          Settings That Affect Credit Invoices
           

          Invoice & Company Settings
           

        • Credit Invoice numbering format

        • Company branding and logo

        • Document language

        • Currency handling
          
          
           

          Tax Settings
           

        • Reverse tax calculation

        • Item-level tax adjustments

        • Rounding rules
          
          
           

          Approval Rules
           

        • Credit Invoice may require approval

        • Rejection reason can be recorded

        • Audit log maintained
          
          
           

          -  Compliance & Audit Safety
           

          Credit Invoices help ensure:
           

        • Legal financial corrections

        • Tax compliance

        • Accurate accounting

        • Clear customer communication

        • Traceable refund records
          
          
           

          ✅ Benefits of Using Credit Invoices
           

          ✔ Corrects billing mistakes
          ✔ Supports refunds and adjustments
          ✔ Maintains legal compliance
          ✔ Improves customer trust
          ✔ Clear audit trail
          ✔ API-ready automation
          ✔ Prevents financial inconsistencies
          
          
           

          -  Summary
           

          A Credit Invoice (Credit Note) is a critical financial correction tool within the Documents Module.
           

          It ensures:
           

        • Accurate financial records

        • Proper tax reversal

        • By using Credit Invoices, businesses can confidently manage returns, cancellations, and corrections without breaking accounting or tax compliance.

        • Transparent customer communication

        • Safe and auditable refund handling

      • Return Invoices (if applicable)