Credit Notes

Credit notes are the proper way to correct invoices, process refunds, or handle returns. This guide explains when and how to use them in Hisab.

What is a Credit Note?

A credit note is an official document that:

• Reduces or cancels an invoice amount
• Creates a record for accounting purposes
• Maintains DGI compliance
• Provides customer documentation

Important: Never delete a finalized invoice. Use a credit note instead.

When to Use Credit Notes

Creating a Credit Note

Step 1: Find the Original Invoice

1. Go to Invoices
2. Find the invoice to credit
3. Invoice must be finalized/sent/paid

Step 2: Issue Credit Note

1. Click on the invoice
2. Click Actions > Issue Credit Note
3. Credit note form opens

Step 3: Fill Details

Reason (required):

• Goods Returned
• Billing Error
• Agreed Discount
• Service Cancellation
• Other (specify)

Detailed Reason: Add specific explanation for your records.

Step 4: Select Items to Credit

Full Credit: Keep all items as-is

• Credits the entire invoice amount

Partial Credit: Edit quantities or remove items

• Only credits selected items/amounts

Example - Partial Credit:

Original Invoice:

Website Development   10,000 MAD
Hosting (1 year)       1,200 MAD
Domain Name             150 MAD
──────────────────────────────────
Total:                11,350 MAD

Credit Note (customer returned hosting):

Hosting (1 year)       1,200 MAD
──────────────────────────────────
Credit Total:          1,200 MAD

Step 5: Create and Review

1. Click Create Credit Note
2. Credit note saved as draft
3. Review all details

Step 6: Finalize

1. Click Finalize
2. Credit note number assigned (CN-2024-0001)
3. Original invoice status → "Credited"

Step 7: Send to Customer

1. Click Send
2. Customer receives credit note PDF
3. PDF shows credited amounts

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Credit Note Numbering

Credit notes have their own sequence:

• Format: CN-YYYY-XXXX
• Example: CN-2024-0001

Separate from invoice numbers for clear tracking.

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One Invoice = One Credit Note

Rule: Each invoice can only have ONE active credit note.

If you need to issue another:

1. Void the existing credit note first
2. Then create a new one

This prevents confusion and maintains accuracy.

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Credit Note Status Flow

┌─────────┐    ┌───────────┐    ┌──────┐
│  DRAFT  │ → │ FINALIZED │ → │ SENT │
└─────────┘    └───────────┘    └──────┘
                     │
                     ↓
               ┌──────────┐
               │   VOID   │
               └──────────┘

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Effect on Original Invoice

When you finalize a credit note:

• Original invoice status changes to "Credited"
• Shows orange "Credited" badge
• Links to credit note visible
• Revenue adjusts in reports

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Viewing Linked Documents

From Invoice:

1. Open the credited invoice
2. See "Credit Notes" section
3. Click to view linked credit note

From Credit Note:

1. Open the credit note
2. See "For Invoice" link
3. Click to view original invoice

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Voiding a Credit Note

If you issued a credit note by mistake:

1. Open the credit note
2. Click Actions > Void
3. Enter reason
4. Confirm

What happens:

• Credit note marked as void
• Original invoice status reverts
• Can issue new credit note

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Credit Notes in Reports

Credit notes appear in:

• Invoice Report: Shown as negative amounts
• Tax Report: Reduces VAT collected
• Customer Report: Affects customer totals

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Best Practices

1. Document Everything: Add detailed reasons
2. Send Promptly: Notify customer of credits
3. Partial Credits: Use for returns of specific items
4. Full Credits: Use for complete cancellations
5. Keep Records: Credit notes stored for 10 years

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Common Questions

Can I edit a credit note? Only in draft status. Finalized credit notes are locked.

What if customer already paid? Issue credit note anyway. Arrange refund separately.

Do credit notes affect taxes? Yes, they reduce your VAT collected for the period.

Can I create credit note for draft invoice? No, only for finalized/sent/paid invoices.

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Related Articles

• Invoice lifecycle
• Tax reports
• DGI compliance