How to issue a credit note

Sometimes an invoice needs to be reduced or reversed — a price was wrong, a customer was overcharged, or part of a job was refunded. The correct, tidy way to do that is a credit note, not deleting or editing the original invoice.

The Issue Credit Note form: it's raised against a specific invoice and notes it reduces the amount owed without modifying the original; a CN-prefixed reference, an optional reason field, and an 'Items to Credit' list where each unit price can be adjusted (or set to 0 to exclude), with a negative credit total. — The Issue Credit Note form — raised against an invoice, with a reason and per-item amounts.

What a credit note is

A credit note records that you owe the customer some amount back against an invoice — effectively “cancelling” part or all of it. It leaves the original invoice intact and adds a proper, traceable correction.

Why not just edit or delete the invoice?

Invoice numbers should run in an unbroken sequence — deleting one leaves a gap that looks wrong to HMRC.
Editing a sent invoice means your copy and the customer’s no longer match.
A credit note keeps a clean audit trail: here’s what was charged, here’s what was credited, here’s why.

Creating a credit note

Find the invoice that needs correcting and raise a credit note against it.
The credit note gets its own CN-prefixed reference, so it’s easy to track.
Add an optional reason (e.g. overcharge on materials, disputed work, goodwill adjustment).
Adjust the items to credit — set each item’s unit price to what you’re crediting back, or set it to 0 to leave that item out. The credit total updates automatically.
Save and share it with the customer, just like an invoice.

When to use one

You overcharged on an invoice already sent.
You’re refunding part of a job.
A price or line item was wrong after the invoice went out.
You’re giving a goodwill discount after invoicing.