A Credit Note is essentially a negative invoice — it documents that you owe money back to a customer, whether due to a billing error, returned goods, or a pricing dispute.

You can use it to either issue a direct refund or keep the amount as “store credit” to offset future invoices.

Create a Credit Note

Managing Credit Note Status

Once saved, the credit note enters a lifecycle similar to an invoice. The status bar at the top right tells you exactly where things stand.

• Draft: Still working on it — no financial actions can be taken yet.
• Open: Finalized and active. The credit balance is now available to use.
• Applied: The credit has been used to pay off another invoice.
• Refunded: The credit has been paid back to the customer in cash or bank transfer.
• Void: The credit note has been cancelled.

Using Available Credits

Once a credit note is Open, the sidebar on the right gives you two options: Credit Apply and Credit Refund.

Option 1: Apply to Invoices (Store Credit)

Customer has other unpaid invoices? Use this credit to reduce their debt.

1. In the right sidebar under Credit Apply, click Apply.
2. A modal appears listing all open invoices for that customer.
3. Find the invoice you want to pay — the table shows Invoice Amount, Due Amount, and an input field for Credits to Apply.
4. Enter the amount to allocate.
5. Click Apply to complete the transaction.

Option 2: Issue a Refund

Need to return money directly to the customer (via cash or bank transfer)?

1. In the right sidebar under Credit Refund, click Refund.
2. In the Credit Note Refund modal, fill in:
   • Amount: The total being refunded (e.g., Rs 3,500.01).
   • Refund Date: When the money left your account.
   • Account: The bank or cash account the money is withdrawn from.
   • Payment Mode: The method (Check, Cash, Bank Transfer, etc.).
3. Add a Description if needed, then click Refund.