Definition: Credit Note

What is a Credit Note? Definition and meaning

In the accounting sense, a credit note is understood as a reverse invoice. This is also often referred to as an invoice correction.

Unlike an invoice, a credit note is issued by the recipient of the service.

Credit Note vs Bank Credit: which one is meant

In banking, a credit means money coming into an account, that is, the posting of an incoming amount. In this glossary, however, a credit note refers to the accounting document: a reverse invoice that the recipient of the service issues. This is the meaning this article deals with.

Mandatory Information for a Credit Note

Title -> Credit Note
Address of the service recipient and service provider
Tax number and VAT ID of the service provider
Document number and date
Delivery or service date
Line items with prices and quantities
Total amount
Tax rates of the line items
Tax rate and amount

Frequently asked questions

Who issues a credit note?

Unlike an invoice, a credit note is issued not by the service provider but by the recipient of the service. This is why it is also called a reverse invoice.

What mandatory details belong on a credit note?

A credit note needs the title “Credit Note”, the addresses of the service recipient and the service provider, the tax number and VAT ID of the service provider, the document number and date, the delivery or service date, the line items with prices and quantities, the total amount as well as the tax rates and the tax amount.

How do I create credit notes in software?

With invoicing from projectfacts, you create credit notes with all the required mandatory details.