A credit note template is short, and one field on it does most of the work: the original invoice number. Without it, neither your accounts nor the customer’s can match the two documents, and the credit floats unreconciled.
Fix these once
- Your business name, address and tax registration number.
- The title, Credit Note.
- A prominent row for the original invoice number.
- Your standard reason wording, if you use codes.
Leave these blank
The customer, the credit note number, the date, the reason, the lines and the amounts. And the original invoice number, obviously, but leave the labelled row in place so it is a blank someone notices.
A template to copy
[Your business name]
[Address] · [phone]
[Tax registration number]
CREDIT NOTE No. CN-____
Date: ____
Issued to
[left blank]
Against invoice ____
Reason ____
Description Qty Rate Amount
____________________________ ___ ______ ______
Subtotal ______
Tax __% ______
Total credited ______
This credit note reduces the amount owed on the invoice above.Keep the figures positive
A credit note for 4,200 is clearer than an invoice for minus 4,200. The title does the work of saying it reduces what is owed.
Match the original invoice’s rates exactly. If you charged 1,400 per unit and three came back, credit three at 1,400. Rounding the credit to a convenient number is how the two documents stop reconciling.
Credit only the affected lines
A partial credit is normal. List the lines being credited and only the quantities being returned. The rest of the original invoice stands.
Do not restate the whole invoice with a smaller total. That produces two documents claiming to be the whole picture.
Variants
Return. Quantity and rate columns, a reason line, and a note of who collected the goods.
Price correction. One line, no quantity, describing the correction: “Rate corrected from 1,650 to 1,400 on 12 units, invoice INV-2026-0038.”
Goodwill. A single line and an amount, with the reason stated plainly. These are worth wording carefully, since they are the ones queried later.
Each is a saved file, written to your own disk with Save as file.
Tax
If you charged tax on the original, credit it proportionally. A credit note that reverses the net but not the tax leaves both sides with a tax position that does not reconcile.
Where your jurisdiction requires specific wording on a tax credit note, put it in the template rather than remembering it each time.
Numbering
Its own sequence, CN-0001 upward. Never fold credit notes into the invoice sequence, since that leaves gaps in the invoice numbers that look like missing sales.
A check before saving
- Is there a labelled row for the original invoice number?
- Is the reason field present?
- Are the amounts blank and positive-formatted?
- Does the title say Credit Note?
Next
For when to issue one and what it does, see fixing an invoice you already sent. For the difference between crediting and refunding, see credit note or refund. Or open the credit note generator.