Invoicary

Free Credit Note Template

By Nico · Last reviewed

Issue a credit note against a previous invoice: itemize the credited amount and reason, reference the original invoice, and download a PDF. Free, no signup.

Create this invoice → Free · no signup · downloads as PDF

What this template looks like

A filled-in example. Your details replace the placeholders — nothing here is saved.

CREDIT NOTE
# INV-0042
FromYour Business Name
Your address
City, Postcode
Bill ToClient Name
Client address
City, Postcode
Issue DateMar 14, 2026
Due DateMar 28, 2026
DescriptionQtyRateAmount
Credited item / reason 1 $1,200.00 $1,200.00
Subtotal$1,200.00
Total$1,200.00
TermsThank you for your business.

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What to include on a credit note

  • “Credit Note”, a number and the date
  • Your business and the customer
  • The original invoice number being credited
  • The items/amounts being credited and why
  • The total credit and any tax adjustment

When to issue a credit note instead of editing the invoice

Once an invoice has been sent and entered into a customer’s accounts, you should not change it. The correction is a separate document — a credit note — that references the original invoice and reverses part or all of it. This matters because both sides have already recorded the original in their books and, if you are VAT/GST registered, in a tax return. A credit note gives each side a matching entry to cancel against. Typical triggers: goods returned or rejected, a billing error, an agreed discount after the fact, a cancelled order, or a duplicate invoice.

What a credit note has to show

  • The words “Credit Note” — not “Invoice” — plus its own sequential number
  • The date of issue and the number and date of the original invoice
  • Your details and the customer’s, exactly as on the original
  • The lines being credited with quantities and amounts, and the reason
  • Tax reversed at the same rate as the original, shown separately
  • The credit total, and whether it is a refund or an account credit

Partial credits, refunds and debit notes

A credit note does not have to cover the whole invoice. If two of five items were returned, credit those two lines only and leave the rest payable — the customer then pays the difference. If money has already changed hands, say on the note whether you are refunding it or holding it as a credit against the next invoice; ambiguity here is what generates chasing emails. The mirror image is a debit note, which increases the amount owed (an undercharge or an extra cost). Convention varies by country and by who issues it, so state plainly what the document does rather than relying on the label alone.

FAQ

When do you issue a credit note?
When you need to reduce or cancel an amount on a previously issued invoice — for a return, overcharge, or discount applied after invoicing.
Can a credit note be for more than the invoice?
It should not be. Credit up to the value of the original invoice; anything beyond that is a separate transaction and belongs on its own document, or your ledgers and tax records stop reconciling.
Does a credit note need to show tax?
If the original invoice charged VAT/GST, the credit note must reverse it at the same rate and show it as its own line — that is what lets both sides adjust their tax returns correctly.
How do I number credit notes?
Give them their own sequence (CN-0001, CN-0002 …) rather than reusing invoice numbers, and always print the original invoice number on the note so the pair can be matched.

More invoice templates

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