A Credit note indicates a return of goods or services. The supplier issues a Credit note to the consumer. It is also known as a Credit memo or Credit memorandum.
Why are Credit notes issued?
A credit note is usually issued for the following reasons:
- Consumer returns
- Error in the original invoice
- Damaged products
- Error in quantity sold and received by the customer.
A Credit note's contents are as follows:
- The supplier's name, address, and VAT number (if you are a VAT registered business)
- Credit note number
- Payment or refund terms
- Contact details of the supplier
- Description or reason for issuing a credit note