Credit notes, refunds, returns and write-offs

Sometimes part of a sale has to be undone: something came back, something was charged wrong, you're giving money back as a gesture, or the money is never going to arrive.

Credit notes are under Payments & credits in the Sales menu, next to the payments they offset. Each credit note is a numbered document with its own list, filters and export.

Two documents cover this, and they mean different things:

• A credit note says the client doesn't owe this. The sale was wrong, or part of it came back.
• A write-off says the client owes this and you won't get it. The sale was right, and the money is lost.

Neither one is voiding. Voiding says the document should never have existed, which stops being true once someone has paid it, filed it or reported on it.

Sending a credit note

Open the credit note and click Send to email it to your client as a PDF in your workspace's design, with an optional note. Print opens a print view and Download PDF saves the same PDF. The History tab records who it went to.

Issuing a credit note

On an invoice, Issue credit opens the line picker. Tick what you're crediting, how many of each, and, for goods, what state each line came back in. The state is per invoice line: if three candles on one line came back fine and one cracked, issue two credit notes.

Turn off Put the goods back into stock when the client keeps what they have, for a goodwill credit or a price correction. Goods come back only through a credit note with that switch on; there's no separate return.

A line credited in full shows struck through and can't be credited again. A line credited in part can only take what's left: 2 sold and 1 already credited leaves 1, and asking for more is refused with how many are left. A voided credit note gives its quantity back.

Issue credit note issues it straight away. Save as draft keeps it as a draft instead, for a credit you're still agreeing with the client: nothing moves until you click Issue on its page. A draft can be deleted; to change its lines, delete it and credit again.

Edit details on a credit note changes its number, date, reason and notes, before or after it's issued. Its lines and amounts stay as they were, and the history records each change.

Credit notes are raised from an invoice's lines in the app. A credit note that isn't tied to an invoice can be created through the API.

Where the money goes

Issuing a credit note puts its whole amount on the client's credit balance. What happens to it next is up to you, in one go or in parts:

• Apply it to an invoice. The invoice's balance goes down. An invoice cleared by credit is Paid.
• Leave it on the account for a later invoice.
• Refund it. Through the payment processor when the original payment was online, or recorded as cash, bank transfer or other when you moved the money yourself.

A credit note always adds up: total = applied + refunded + still on account.

Take off, next to an invoice the credit was applied to (on the credit note or on the invoice), takes it back off: the invoice owes that amount again and the credit goes back on the client's account.

Refund and Void on a credit note are for owners and admins. You can void a credit note while none of it is applied or refunded, so take it off its invoices or undo its refunds first. Voiding takes the credit back off the client's balance, and goods it put back on the shelf come off again, at the value they came back at. Archive takes a credit note off the list without voiding it.

Client credit

The client's Money tab shows the credit they hold. Credit history lists the latest 20 movements, newest first, each with the balance it left, so you can see where "$42 of credit" came from.

One payment, several invoices

When a client clears several invoices with one transfer, use Record payment on the client's Money tab. Enter the amount that arrived and put it against whichever of their open invoices it settles. Leave the boxes empty and it goes against the oldest first. Anything left over becomes credit on their account. The form shows only when the client has open invoices.

A payment recorded on an invoice, or from Payments & credits → Record payment, goes on that one invoice in full, and an overpayment there doesn't become credit.

Credit from an overpayment shows on the client's balance. Apply and Refund are on credit notes, so there's no button to spend that credit yet.

Writing off a bad debt

Write off on an invoice records all or part of the balance as a bad debt. The invoice stops being chased and shows as Written off.

It doesn't reduce what you sold. The sale and its revenue stand, and the lost money is reported as a bad-debt expense. That's the difference from a credit note, and it's the difference your accountant cares about.

Owners and admins only. If the money turns up, Reverse write-off brings the balance back. A late payment doesn't undo it by itself, since the write-off was reported as an expense.

Returns and your stock

Quarantined stock counts toward what you own and what it's worth, but not toward what's available to sell. The app can't release it from quarantine yet. See returns and quarantine.

Reporting

Credits and refunds in Reports groups the period by reason, with what was applied, refunded and left on account, and the credit rate against what you sold. Bad debt written off is shown next to it, not inside it.