# Introduction - Credit Notes

A credit note reverses value on an invoice that has already been sent.

**Video coming soon:** Raising a credit note, applying it to an invoice, and refunding the rest.

It is the correct answer to almost every question that starts "I need to change an invoice but it has gone out", because it corrects the amount without breaking the numbering sequence auditors rely on.

![The Credit Notes screen. A table lists credit notes with columns for Date, CN number, Customer, Reference Number, Invoice Number, Balance, Sales Person, Amount and Status. Every row shows an Open status with Balance equal to Amount.](https://www.sorviai.com/help/credit-notes/credit-note-list.png)

*An Open credit note still has balance to apply. Applying it to an invoice brings the balance down.*

## When to credit

| Situation | Right action |
| --- | --- |
| Invoice is still a draft | Just edit it. No credit note needed. |
| Invoice sent, wrong amount | Credit note for the difference, or full credit plus a new invoice. |
| Invoice sent, entirely wrong | Void it if nothing was paid, otherwise credit it in full. |
| Goods came back | Raise a Return, which produces the credit for you. |
| Customer will not pay a valid invoice | That is a bad debt, not a credit note. Handle it in Accountant. |

> **Warning:**
>
> **A credit note is not a delete**
>
> Crediting leaves both documents in place: the original invoice and the credit against it. That is deliberate. The history of what was billed and then corrected is exactly what an audit needs to see.

## What crediting actually does

A credit note reverses revenue and tax in the period it is dated, not in the period of the invoice it corrects. That is why a credit raised in April against a March invoice moves revenue between two months rather than restating March.

1. **Invoice sent**: Revenue and tax posted
2. **Credit note**: Value reversed, dated today
3. **Apply or refund**: Offset, or money back

> **Note:**
>
> **It is a document, not an adjustment**
>
> Credit notes have their own numbering series, their own PDF and their own place in your reports. They are as real as the invoices they correct.

## Credit note against return

The question is only ever whether physical goods are coming back. A credit note moves value. A return moves value and stock, and produces the credit note itself. Raising a credit note for goods that came back leaves your stock figures wrong.