Free credit note generator

When to issue one instead of editing the invoice

Once an invoice has gone to a customer, leave it as it is. If the amount turns out to be wrong, issue a credit against it. Both documents then stay in your records, and anyone checking your books can see the original charge, the correction and the reason for it.

• You overcharged, or billed the wrong quantity or rate.
• The customer returned goods, or part of the job was canceled.
• You agreed a discount or a goodwill reduction after billing.
• The same invoice was sent twice by mistake.
• The whole sale was canceled and needs reversing in full.

How to use the credit note generator

Start from the invoice you are correcting, because the credit should mirror it: same seller, same customer, same tax treatment. Fill in the original invoice number, then list only what you are crediting. The totals show how much is credited, including the tax.

• Choose the country and tax setting that the original invoice used.
• Enter the original invoice number and its date in the Original invoice field.
• Check the number. It starts at CN-0001; continue your own series if you have one.
• Add each credited line at its original price, with the quantity you are crediting.
• Write the reason in the notes, in plain words your customer will recognize.
• Say how the credit will be settled: a refund, a deduction from the next invoice, or a lower balance owed.
• Download the PDF and keep it with the original invoice.

What to include on the document

A credit should be easy to match to the invoice it changes. Your customer’s bookkeeper will look for three things first: the original invoice number, the amount credited and the reason. The rest mirrors a normal invoice, so your tax details and theirs appear exactly as before.

• A clear title, Credit Note, and its own number, such as CN-0009.
• The issue date.
• Your name, address and tax number, and the customer’s details.
• The original invoice number and date.
• The lines, quantities and prices being credited.
• Tax at the rate charged on the original, and the total credit.
• The reason, and how the credit will be settled.

Example: crediting part of an invoice

Here is a filled example from a UK print shop. It printed 500 appointment cards with the wrong phone number, reprinted them free, and credited the first batch. The businesses and prices are invented. The credit carries the same 20% VAT as the original line.

Tax on a credit

Reverse the tax at the rate that was charged on the original invoice, so the two documents reconcile line by line. If you were not registered when you issued the original, there is no tax to reverse. If a rate has changed in between, check your tax office’s guidance before you issue it.

Ireland is a live example: some services moved from 13.5% to 9% on 1 July 2026. A credit against a June 2026 hairdressing invoice would need care, so ask Revenue or your adviser which rate applies.

Numbering and record keeping

Give credits their own series, with a prefix such as CN, so they never share a number with an invoice. Keep each one filed with the invoice it changes. If you send several against the same invoice, quote the invoice number on each so the trail is complete.

Our guide to what a credit note is covers debit notes and credit memos too. To set up the CN series, use the invoice number generator. For a corrected bill, go back to the free invoice generator, or the VAT invoice maker for UK, Irish, South African or UAE sales. If you bill from a template, the UK layout has matching fields.