# Apply and Refund

A credit note ends one of two ways, and only one of them moves money.

A credit note is a balance in the customer's favour. It sits there until you either set it against something or pay it out.

## Apply it to an invoice

- **Open the credit note**

  Its unapplied balance is shown against the customer's open invoices.

  ![A credit note record showing its number and status, the customer, the invoice it corrects, the credited lines and the total, with an activity panel at the right.](https://www.sorviai.com/help/inventory/credit-notes/credit-note-detail.png)
- **Enter an amount against an invoice, and save**

  That invoice's balance due drops. No money moves anywhere.

## Or refund it

- **Record a refund against the credit note**

  Enter the amount, the date and the account it is going out of.
- **Save**

  Real money leaves. This is the deliberate one.

**Apply** (the common case)

- Yes: Reduces what they owe
- No: Money leaves your account
- Yes: Needs an open invoice

**Refund**

- Yes: Reduces what they owe
- Yes: Money leaves your account
- No: Needs an open invoice

> **Tip:**
>
> **Apply first, refund what is left over**
>
> A customer who trades with you regularly would usually rather have the credit against their next order than a bank transfer. Refund the remainder only when the relationship is ending or they ask.

> **Note:**
>
> **A partly applied credit note is a normal state**
>
> It can be split across several invoices and over time. The balance simply stays on the account until it reaches zero.