A credit note is a document a seller gives to a buyer to show that the buyer is being credited for a certain amount. This usually happens because the buyer returned some goods, the seller made a mistake in the original invoice, or there was some other reason the buyer is owed money.
It’s like getting a store gift card when you return something, but it can also be used to reduce the amount you owe on future purchases.
You should create a sales return or credit note in these situations:
- Damaged Goods: The customer receives products that are broken or damaged.
- Incorrect Items: The customer receives the wrong items or the wrong number of items.
- Quality Issues: The products do not meet the quality standards promised.
- Excess Inventory: The customer wants to return extra items they don’t need.
- Pricing Errors: The customer was charged too much.
Please refer to the below article to create credit note
Please refer to the below article to convert sales invoice to credit note/ sales return
Please note that creating a credit note will not automatically reduce the credit note amount from the original sales invoice. To settle the invoice’s outstanding amount, you need to settle the sales invoice with the corresponding creit note/ sales return
Please refer to the below article to settle credit note/ sales return with sales invoice.