How credit notes work
A credit note corrects or reverses an issued invoice with negative amounts, without changing it. Approving it is final, and it doesn't move money.
Anyone with the «Sales» permission sees credit notes. Creating, approving, voiding and deleting them needs edit mode.
No add-on is needed.
Rental jobs don't always end the way they were invoiced. The client sends equipment back unused, you agree on a discount after the event, a price was wrong, or the job is called off. Once an invoice is issued, you can't edit it. You correct it with a second document.
That document is a : a new document, with negative amounts, that corrects or reverses an issued sale in full or in part. Think of it as the invoice's mirror image. It takes off what you no longer charge and leaves the invoice exactly as it was.
Take the Landmark Venues wedding. You invoiced three large frame tents, 120 Chiavari chairs and 12 round tables. After the event, the client sends back 20 chairs that were never set up, and you agree not to charge for them. You don't touch the invoice: you issue a credit note for those 20 chairs. The invoice stays as the record of what you billed, and the credit note records the correction with a number of its own.
Three things to know first
- You usually create it from the invoice it corrects, its , so the client and the lines come preloaded. You can also issue a , with no invoice behind it.
- Approving it is final. It gets the next number of its and is locked: from then on you can only void it.
- It doesn't move money. If you give money back to the client, you record the refund as a payment on the credit note.
Where credit notes live
There's no separate menu. Credit notes are in «Sales» → «Invoices», together with invoices and simplified invoices, and each row shows its type. Open one to see the document on the left and, on the right, «Related documents» (the original invoice, the order and the project), the «Payments» card, emails and tasks. «Send», «Approve» and the «⋮» menu are at the top.
Credit note statuses
| Status | What it means | What you can do | Effect on the order |
|---|---|---|---|
| Draft | In preparation, with no number. The client doesn't see it. | Edit, approve or delete it | None |
| Validated | Approved: numbered and locked. | Send, download, record refunds, void it | Subtracts from the order's actual revenue |
| Voided | Voided with a reason. It keeps its number. | View it. It can't be reactivated | Stops subtracting |
In the , the client sees an approved credit note as «Issued» and a voided one as «Voided». Drafts never reach the portal.
What you can do, and where
| You want to | Where | How |
|---|---|---|
| Choose the right correcting document | The document you're correcting | Credit note or simplified rectifying invoice |
| Credit an invoice, in full or in part | The invoice → «Convert to» → «Credit note» | Create a credit note for an invoice |
| Issue one without an invoice | «Invoices» → the arrow next to «New Invoice» | Create a credit note for an invoice |
| Make it official | «Approve», in the editor or on the page | Create a credit note for an invoice |
| See what it changed | The invoice, the order and the portal | What a credit note changes |
| Send it to the client | «Send», on the credit note | Send a document |
| Give the money back | «Payments» → «Add payment» | Refund a client after a credit note |
| Cancel an approved one | «⋮» → «Void» | Void a credit note |
| Change how they're numbered | The numbering settings | Document numbering |
Good to know
- Filmo doesn't compare a credit note with its invoice. It won't stop you from crediting more than you invoiced, crediting the same invoice twice, crediting a voided invoice or dating the credit note before the invoice. Check them before you approve.
- Approving a credit note doesn't send it to your accounting program or to the tax agency. Sending it to Xero, QuickBooks or Holded is done by an automation you turn on. See Send invoices and credit notes to Xero.
- The doesn't find credit notes. Look for them in the «Invoices» list.
- NEO can prepare a credit note for you to review, and approve or void one after you confirm.
Up next
Not sure whether you need a credit note or a simplified rectifying invoice? See Credit note or simplified rectifying invoice.