Free Online Credit Note Generator

What is a credit note

A credit note is a document you send to reduce or cancel an amount a client already owes, or already paid, on an invoice. It formally records the credit so both sides have a paper trail, whether the reason is a refund, a billing error, or returned goods.

When to issue a credit note

Issue a credit note whenever an invoice you already sent needs to be reduced after the fact:

• You overcharged a client, or made a pricing or calculation error on the original invoice.
• The client returned goods or canceled part of an order after the invoice was issued.
• You are refunding a client, in full or in part, for a service that did not meet the agreed scope.
• You agreed to a discount or goodwill credit after the original invoice was already sent.

What to include on a credit note

• A unique credit note number, separate from your invoice numbering.
• The number of the original invoice the credit relates to.
• The date issued, and the reason for the credit.
• The credited line items or amount, with tax adjusted to match the original invoice.

Credit note vs debit note

A credit note reduces what a client owes you. A debit note does the opposite: it increases what they owe, typically because the original invoice undercharged them or extra items were added after the fact. Most freelancers and small businesses only ever need the credit note side, but the two documents mirror each other.