Apply or refund a credit note

A sent credit note is settled in one of two ways: apply it against an invoice, or refund the customer in cash.

Apply it to an invoice

1. Open the credit note. The Applied to invoices panel shows the amounts applied, refunded, and remaining.
2. Choose Apply to an invoice.
3. Pick the Invoice from the contact's outstanding invoices and enter the Amount to apply.
4. Choose Apply credit note.

The invoice's outstanding balance falls by that amount, and the credit note's remaining credit falls to match. You can also start from the other side: on a sent invoice with a balance due, choose Apply credit note and pick the credit note. Either way, both documents must be for the same contact and in the same currency.

To undo an application, remove the allocation with the cross in the Applied to invoices panel.

Refund it in cash

If you pay the money back instead, record it from your bank, like an invoice payment in reverse.

1. Go to Banking, open the account, and open the money-out transaction for the refund.
2. Set the Type to Credit Note Refund.
3. In the Credit note field, choose the credit note, then save.

See Explain a transaction for the explaining flow in full.

Returned goods and other outcomes

If a credit note line is linked to a tracked stock item, the quantity returns to stock when the note is sent - see Stock movements. Once fully used, the credit note's status becomes Applied, Refunded, or Settled for a mix of both. A sent credit note that will never be used can be closed with Write off, as long as nothing has been applied or refunded against it.