---
title: "Credit Notes"
description: "A credit note is a document issued to a client that reduces the amount they owe."
---

> Documentation Index
> Fetch the complete documentation index at: https://docs.beelocity.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Credit Notes

A **credit note** is a document issued to a client that reduces the amount they owe. It is the reverse of an invoice — while an [invoice](./sales-invoices.html) creates a financial obligation, a credit note reduces or cancels it. Credit notes are used to handle returns, pricing corrections, damaged goods, or any situation where a client is owed a refund or adjustment.

Each credit note is linked to the original invoice it adjusts. You can issue a full credit (reversing the entire invoice) or a partial credit (adjusting specific lines or amounts).

## Key Concepts

- **Credit Note** — A formal document reducing a client's outstanding balance, linked to a specific invoice.
- **Credit Note Line** — An individual item on the credit note, referencing the original invoice line being adjusted.
- **Partial Credit** — A credit note that covers only some of the items or amounts from the original invoice.
- **Full Credit** — A credit note that reverses the entire invoice amount.

## Creating a Credit Note

To create a new credit note:

1. Navigate to **Sales > Credit Notes** in the sidebar.
2. Click **New**. This opens a new credit note page.
3. Fill in the details:
- **Credit Note Number** — A unique identifier (e.g., CN-2026-0012).
- **Invoice** — Select the original invoice being adjusted.
- **Client** — The client receiving the credit (must match the invoice's client — issuing is refused otherwise).
- **Reason** — Why the credit is being issued (e.g., "Return", "Pricing error", "Damage").
- **Issue Date** — The date the credit note is issued.
- **Currency** — The currency (must match the original invoice — issuing is refused otherwise, since the credit nets the invoice's balance directly).
- **Notes** — Any comments visible to the client.
- **Internal Notes** — Private notes for your team.
4. Click **Save**. The credit note is stored in **Draft** status and you land on its page. Picking the invoice fills in the client and the currency for you — both have to match it, or issuing is refused.

## Managing Credit Note Lines

After creating a credit note, add the items being credited:

1. Open the credit note by clicking its number in the list. The note's details are on the left of the page and its **Lines** are beside them on the right.
2. Click **Add Line** for each item, then double-click a cell to edit it:
- **Product** — The product being credited.
- **Description** — What the credit is for, in the words the client will read.
- **Quantity** — The quantity being credited (e.g., 50 units returned out of 200 invoiced).
- **Unit** — The unit of measure.
- **Unit price** — The credit per unit (typically matches the original invoice price).
- **Tax %** — The applicable tax rate (should match the original line).
3. **Total** is calculated for you, along with the note's subtotal, tax and grand total.

Lines can only be added or modified while the credit note is in **Draft** status.

## Credit Note Workflow

A credit note has a short, deliberate lifecycle with three statuses:

### 1. Draft

The credit note has been created but not finalized. You can add, edit, or remove lines. Draft is the only status where changes are possible.

### 2. Issued

Open the note and the road along the bottom of its page shows where it has got to: **Draft → Issued**, the two steps of a credit note that does its job. **Issued** is the step waiting, so click it to book the credit against the original invoice. Issuing reduces the invoice's amount due by the credit total and locks the credit note's content — lines can no longer be edited. Rest on a step already passed to see when it was reached and by whom.

For **Return** and **Damage** credit notes, the issue dialog also offers an optional **restock warehouse**. Pick one and the goods on the note's product lines re-enter stock at that warehouse in the same step:

- Goods on a **Return** note come back as sellable stock, immediately available again.
- Goods on a **Damage** note are booked into stock as *Damaged* — recorded and traceable, but held out of the sellable quantity.

Leave the warehouse empty to issue the credit without touching inventory (for example when the goods were never returned). Credit notes for pricing errors, quantity errors, or goodwill never move stock — they adjust the client's balance only.

### 3. Cancelled

Cancelling leaves the road, so it is picked off the map rather than on it: click the step the note is standing on and choose **Cancelled**. A draft that is no longer needed simply closes with no effect.

An **issued** note can also be cancelled, as the correction path for a credit issued in error. Cancelling reverses everything issuing did: the credit applied to the invoice is restored to its amount due (its status rolls back accordingly, including straight to Past due when the due date has passed), and any goods restocked at issue leave stock again. Two conditions protect the books — the cancellation is refused if either fails:

- **No refund has drawn on the credit.** If a refund payment was allocated against the note's remaining balance, that money already moved; remove the allocation first, or correct the balance with a new invoice.
- **The restocked goods are still untouched.** If any of them were since sold, moved, or adjusted, the stock can't be pulled back; correct with a new invoice instead.

> **Issued a credit note by mistake?** Cancel it (see above) while nothing has consumed the credit or the restocked goods. Once something has — a refund drew on it, or the goods moved on — correct the client's balance with a new invoice instead, referencing the erroneous credit note in its notes.

## Credit Note Totals

| Field            | Description                                        |
| ---------------- | -------------------------------------------------- |
| **Subtotal**     | The sum of all credit line totals before tax.      |
| **Tax Amount**   | The total tax credit across all lines.             |
| **Total Amount** | The final credit amount including tax adjustments. |

## Finding a Credit Note

The **Credit Notes** list searches by number, and its filter button narrows it by **Reason**,
**Status**, **Client**, **Invoice**, **Currency**, an **Issue Date** range or a **Total** band
(see [Working with lists](../getting-started/working-with-lists.html#narrowing-the-list)).

## Important Notes

- Each credit note must be linked to an existing invoice and client.
- Credit note lines can only be edited while in Draft status.
- Issued credit notes affect the client's outstanding balance immediately — review carefully before issuing. Cancellation remains possible only while nothing has consumed the credit or the restocked goods.
- **The credit is applied to its linked invoice up to that invoice's outstanding balance** — it will never reduce an invoice below zero (its **Amount Due** stops at 0.00 DA). If the credit is larger than what the invoice still owes, the leftover stays available on the credit note as remaining credit, which can be refunded to the client later. A credit note applied to an invoice that is already paid (or not yet sent) keeps its full value available.
- Use credit notes instead of deleting or modifying invoices — this maintains a clear audit trail.
- If goods are being physically returned, coordinate with the warehouse team to process the return alongside the credit note.

Source: https://docs.beelocity.com/en/sales/credit-notes/index.mdx