# Apply a credit note or refund it

Setting a credit against what the customer owes, or paying it back when there is nothing to set it against.

An open credit note is a promise you have made and not yet kept. There are exactly two ways to keep it: set it against something the customer owes you, or give them the money back. Which one is right depends on whether they owe you anything.

## Highlights

- **Applying is usually right** when the customer has open invoices.
- **Refunding is right** when they do not, or when they have asked for the money.
- **A credit note can be split** across several invoices.
- **The panel keeps a running total** of what you have applied and what is left.
- **Part of a credit note can be applied** and the rest refunded later.

## Apply it to an invoice

![An Apply Credit Note dialog over credit note CN-00007, headed Apply Credit Note CN-00007 and reading Available credit 2450.00 pounds, allocate it across the customer's open invoices. A table lists invoice INV-00013 with a balance due of 306.12 pounds and INV-00031 with a balance due of 141.36 pounds, each with an empty Amount to Apply box. A footer line reads Applied 0.00 pounds on the left and Remaining credit 2450.00 pounds on the right, above Cancel and Apply Credit buttons.](https://www.sorviai.com/help/repairs/sales/credit-note-apply.png)

*The customer's open invoices with the credit available above them. The running totals update as you type.*

- **Open the credit note**

  Go to **Credit Notes** and select it. It needs to be open rather than draft.
- **Select Apply to Invoice**

  The button sits in the header, and the **Quick Actions** banner offers the same thing.
- **Enter an amount against each invoice you are settling**

  The dialog lists the customer's open invoices with what is due on each. Spread the credit across as many as you need.
- **Check the running totals**

  **Applied** and **Remaining credit** at the foot tell you whether you have used the note up.
- **Select Apply Credit**

  The invoices you allocated against reduce, and the credit note's balance falls by the same amount.

> **Note:**
>
> **Applying moves no money**
>
> Nothing leaves your bank. The customer simply owes less, which is why applying is the tidier answer whenever they have an open invoice: one document cancels part of another and the balances agree.

## Refund it instead

When the customer has nothing outstanding, or has asked for their money rather than a credit, refund the note. The refund is recorded from the credit note, and it asks which account the money is leaving from and why.

*Choosing between applying and refunding*

| Situation | What to do |
| --- | --- |
| They have an open invoice for at least the credit | Apply it, and the bill reduces |
| They have a smaller open invoice | Apply what fits, then refund the rest |
| They owe you nothing | Refund it |
| They have asked for the money back | Refund it, whatever else is outstanding |
| You are not sure yet | Leave it open. An unused credit note harms nothing |

> **Warning:**
>
> **Do not refund and apply the same credit**
>
> The balance is the guard against this: it falls as you use the note, and there is nothing left to refund once it reaches zero. Trouble comes from refunding outside the system, by transfer or in cash, and leaving the credit note open. The next person applies it to an invoice and the customer has been credited twice.