Free Trial
Try KashFlow BookkeepingSoftware Free for 60 days
Creating a Credit Note
To create a credit note, simply create an invoice for a negative amount.
When you print the invoice, the heading "Invoice" will be replaced with "Credit Note".
If you are refunding the customer then mark the Credit Note as paid on the date you refund the customer.
If you are instead deducting the amount of the Credit Note from the customers next invoice, leave it as unpaid.
Lets assume the Credit Note is for £25 and the next invoice to the customer is for £100. When the customer pays your invoice for £100 you would only expect to receive £75. Mark the invoice as paid in full (ie, the full £100), then on the same date mark the credit note as paid. This will create two transactions in your bank account - one for £100 coming in from the customer and another for £25 going out to the customer. This will result in a net effect of £75 coming in to your account so that everything reconciles correctly.