Credit notes and debit notes
Record sales returns and price reductions with a credit note, and returns to your suppliers with a debit note.
Credit note (sales return)
Use a credit note when a customer returns goods or you reduce what they owe, for example for a price correction.
- Open the invoice and click Credit Note. You can also go to Sales › Credit Notes and click + New Credit Note.
- Check the customer, the items and the quantities coming back or being credited.
- Click Save.
The credit note reduces what the customer owes. Returned goods go back into stock. Settle the credit against another invoice, or record a refund.
Debit note (purchase return)
Use a debit note when you return goods to a supplier, or a supplier reduces their bill.
- Go to Purchases › Debit Notes and click + New Debit Note.
- Choose the supplier and the items going back.
- Click Save.
The debit note reduces what you owe the supplier and takes the goods out of stock.
Note
Credit notes reduce the sales in your GSTR-1 Summary. See GST returns.