A credit note is a negative invoice. Use one when you owe a customer money, for example after a refund, a returned product or a reimbursement. You then apply the credit to the customer's unpaid invoices, so they don't have to pay the full amount.

Credit notes are under Invoices › Credit Notes. Only Administrators and Finance Managers can see and create them.

No Credit Notes menu item, and no Apply Credit Note action on invoices? Then credit notes are switched off for your account. An Administrator or Finance Manager can switch them on under Settings › General, in Enabled/Disabled Modules. Hiding the Invoices module hides credit notes too.

Create a credit note

  1. Go to Invoices › Credit Notes and click Create Credit Note.

  2. Choose the customer and click Create.

  3. Check the details at the top.

    • Credit Note Number: the next number is filled in. You can type another, but each number can only be used once. Avaza carries on from the highest number with the same prefix, so to start again at 1, change the Credit Note Prefix in Settings › Invoice & Bill Settings.
    • Issue Date: today, unless you change it.
    • Amounts are: Tax Exclusive if the unit prices you enter don't include tax, Tax Inclusive if they do. See tax inclusive and tax exclusive.
    • Currency: always the customer's currency. If that isn't your account's currency, the exchange rate is shown, with Edit Rate to change it.
    • Template: the customer's default invoice template. You can pick another.

  4. Add a line for each thing you're crediting.

    Choose the inventory item under Type, or click Add Inventory Item to create one. Add a Description if you like, then the Qty, Unit Price and Tax Rate. Avaza works out the Amount. Enter positive amounts: the whole document already counts as a credit.

    The Create Credit Note page for Harvest & Co., with the credit note number CN 1, the issue date, Amounts are Tax Exclusive, the currency and template, and one credit line of 400.00 with Link project below it

  5. Link lines to a project, if you report on projects.

    With Enable Project Invoice Link switched on in Settings › Invoice & Bill Settings, each line has Link project, listing the customer's projects. The Project Summary report only takes credit off a project for lines linked to it.

  6. Add Notes if you want, then click Save Credit Note.

Credit note CN 1 for Harvest & Co. after saving, with its status Open, 400.00 of available credit, and the Edit, Actions, PDF and Apply to Invoice buttons above it

Apply the credit to invoices

You can do this from either side. Credit can only go to invoices for the same customer, in the same currency, that still have something left to pay.

  • From the credit note: open it and click Apply to Invoice. The popup lists the customer's invoices with a balance. Type an Amount to Allocate next to one or more of them, then click Apply Credit.
The Allocate Credit from Credit Note CN 1 popup, with $400.00 of available credit and 400.00 typed as the Amount to Allocate against invoice INV 2, leaving $0.00 of remaining available credit
  • From the invoice: open it and choose Actions › Apply Credit Note. Type an Amount to Allocate next to one or more of the customer's credit notes, then click Apply Credit.

You can't allocate more than the credit note has available, or more than an invoice still owes. The invoice becomes Partially Paid, or Paid when nothing is left to pay, and shows a Less Credit Note line linking to the credit note. The credit note shows a Less Invoice Allocation line for each invoice, with its date and a link to the invoice. Apply Credit Note isn't offered on invoices that are paid or void, or on retainer invoices.

Applied the wrong amount? Click remove next to the line, on the invoice or on the credit note. The amount goes back onto the credit note.

Credit note statuses

The Credit Notes page lists every credit note with its amount and Remaining Credit. Filter it by status:

The Credit Notes page, listing credit note CN 1 for Harvest & Co. with its status Open, an amount of $400.00 and $400.00 of remaining credit, with the status filter set to All

Status

Meaning

Open

Some credit is still available to apply.

Closed

All the credit has been applied.

Void

Cancelled. It stays on record with a zero total.

Edit, void or delete a credit note

Open the credit note to change it.

  • Edit works until the credit note is void. The new total can't be less than the credit you've already applied.
  • Actions › Void cancels an open credit note, as long as none of it has been applied.
  • Actions › Delete removes an open or void credit note for good, as long as none of it has been applied. Deleted data can't be recovered.
The Actions menu open on a credit note, with Delete and Void

If some of the credit has been applied, click remove next to each allocation first.

Avaza doesn't email credit notes. To send one to your customer, click PDF and attach the file to your own email.

Credit notes in reports

To take money up front and use it up against later invoices, see advance payments.