A Credit Note is a formal document used to reduce or cancel the amount a customer owes on a finalized invoice. PayDocker allows you to issue, track, and manage credit notes to ensure your financial records remain accurate.
Note: Credit notes can only be issued for finalized invoices. If an invoice is still in "Draft" status, you should edit the invoice directly rather than issuing a credit note.
How to access
1. Head to Sales > Invoice, then select the finalized invoice you wish to adjust.
2. Scroll down to the Credit Note section and click + Issue a credit note
3. A form will appear with pre-filled fields based on the original invoice. To edit a line item, select the corresponding checkbox.
4. To configure, you will have to select the check box first to indicate which item you would like to apply the credit note to (See label 2).
Here are some of the key areas you will can configure in your credit note:
| Label | Description | Explanation |
| 1 | Reason | Input your reason for creating this credit note. There are also options available for you to select. If you select Custom, you may type in up to 30 characters. |
| 3 | Check in date | You can edit the check in date, between 5 years before and 2 years after the original check in date. |
| 4 | Nights | You can edit the total number of nights, up to 999 nights. |
| 5 | Guests | You can edit the total number of guests, up to 999 guests. |
| 6 | Rate | You can edit the rate type, selecting between these options:
|
| 7 | Value before taxes | You will be able to edit the value (before taxes) of the item. The value must be greater than 0 and cannot be higher than the original value. |
| 8 | Memo | Write a memo to communicate with your buyers about the adjustments that need to be made, up to 250 characters. |
Your invoice value will also be adjusted according to your credit note details (See label 9).
5. Once you are ready, click Generate.
Each credit note receives a unique tracking number and will be visible under the Invoices and Events sub-sections. The credit note will also have automatically generated fields, based on your invoice detail. These generated fields are not editable.
Your generated credit note will reflect in the invoice summary, Credit Notes and Events subsection.
Invoice summary
Credit Notes subsection
Events subsection
6. You can manage your credit notes directly on this view. Click the ' ... ' to view the credit notes, void, and download the credit note in PDF.
Example of PDF
Once your credit note has been generated, we will notify the team members that have opted in to receive email notifications.
Subsequent credit notes created
Subsequent credit notes are calculated against the latest adjusted balance, not the original total.
Example:
Original Invoice: $100
Credit Note 1 (-$10): New Balance $90
When issuing Credit Note 2, the invoice balance (See point A) will reflect $90.
Additional Credit Notes will also be shown in this format:
Impact on payment & Refunds
After issuing Credit Note, there could be 2 possible scenarios:
- If Payment is Outstanding (Overdue, Outstanding, Frozen): The invoice total is automatically updated to the new, lower balance.
- If Payment is Completed: The balance will show a negative value. You must then issue a Refund.
Processing a refund
Once the Object has been collected, the balance due will be at 0.00. Any credit notes issued after will result in a negative value for balance due.
At this point, you will be able to create a refund on the Invoice directly. Click + Refund button and complete a simple form with the details required.
If you have enabled two-step verification, you may need to provide further authentication to successfully process your refund.
Once processed, a Transaction ID is generated. Refunds are tracked in three areas: Invoice, Object, and Balance.
Refunds listed on Invoice - Refunds & Events section
Refunds listed on Object - Events section
Refunds listed on Balance
Email notifications for refunds
Email notifications will be sent to any account that have opted in for refund notifications on their account.
Managing your Credit Notes
If a credit note was issued in error, you can Void it via the "..." menu. Voiding the credit note will have the following effects:
- Credit note item line will be removed from the invoice
- Any refunds will be reversed
Impact on payment for voided credit notes
- Object has already been collected
- Invoice status will be updated from Paid to Partially Paid. A new object would have to be created for the outstanding amount due. **
** In the event that this new object is rejected, invoice status will change from Partially Paid to Partially Uncollectible. No new credit note can be issued if there are any errors on this step. - Once the new object has been collected, invoice status will revert back to Paid.
- Invoice status will be updated from Paid to Partially Paid. A new object would have to be created for the outstanding amount due. **
- Object has not been collected
- No changes to Invoice status
- No new object will need to be created
- Object value will be based on new balance and this adjustment will be accounted for in the Events section of the object.