What is a credit note?
In short a credit note is the opposite of an invoice. If a customer returns goods the seller can issue a credit note to account for the value of the goods returned.
For example, after having raised an invoice amounting to £20 + VAT to a customer who purchased 10 widgets @ £2 each they subsequently return 2. The seller would then raise a credit note for £4 (2 x £2) + VAT. The customer is then liable to pay the outstanding balance of £16 + VAT.
All credit notes should be clearly identified as such and show the number and date of the sales invoice to which they relate, as well as the information required for a sales invoice.
Milagros Perry lives in Leeds, UK. She enjoys reading and cooking, as well as cross country skiing. She currently provides individuals information about Part time Financial controller Leeds, Part time Financial controller Leeds, Pay as you go bookkeeper Leeds through her articles.