What must a credit note include?
Basic Components:
Bill to: The buyer's full name and billing address.
Credit Note Number: A unique identifier for tracking and reference.
Date: The date the credit note is issued.
Description: Clear details about the goods or services being credited.
Amount: The total credited amount.
Advanced Components:
Ship to: If different from the billing address, indicate where goods were delivered.
P.O. (Purchase Order): Reference to the original order number.
Due Date: If there’s still a balance due, state the due date.
Quantity (Qty): Number of items being credited.
Unit Price: Price per unit for transparency.
When and why is a credit note used?
A credit note is commonly issued in these scenarios:
Returned products: Full or partial return of delivered goods.
Billing mistakes: Errors in the original invoice, such as wrong pricing or quantities.
Service-related issues: Compensation for services not delivered or not meeting expectations.
Post-invoice discounts: Applied for loyalty programs, sales campaigns, or after-the-fact rebates.
Customer overpayment: If a client pays more than the invoiced amount.