Receivables, Payables & Credit/Debit Notes

5. Credit Notes

Purpose

Credit Notes (CreditNotesPage) are customer-side documents used for refunds and adjustments. They reduce what a customer owes, or return value to the customer, in situations where an invoice should not stand as originally issued. They are part of the Accounts Receivable side of the module.

Reasons and application

A credit note records a reason from a defined set: Return, Billing error, Price adjustment, Discount, or Other. Once raised, a credit note can be applied to invoices or issued as a refund, giving two settlement routes depending on whether the customer has an open balance to offset or should receive money back.

Status workflow and balance tracking

Credit notes follow a defined status workflow of Draft, then Approved, then either Applied or Refunded. The Draft and Approved stages provide a review gate before the credit takes effect, and the final state records whether the credit was used against invoices or paid out. The system tracks balances on each note, specifically the total, the amount applied, the amount refunded, and the amount still available. A typical workflow is to create the credit note in Draft with its reason, approve it, and then either apply the available balance to one or more open invoices or process a refund, with the balance fields updating to reflect how the credit was used.