This guidance shows you how to create a credit note for a part paid invoice, meaning that you can write off the remaining amount. This can be used if you issue an invoice and then negotiate a reduced payment.
Creating the Credit Note
To start, go to Invoices > Click ‘Create’ in the top navigation > Select the customer > Add Line Item. Enter in the following:
- Quantity – 1
- Description – Type in a reference, such as ‘Credit for reduced payment on invoice #XXX’
- VAT Rate – This should be the rate you applied to the part paid invoice
- Total – Enter in the amount that you are writing off as a negative, i.e. -100
The net rate and VAT amount will be reverse calculated.
To confirm, click Save in the top right corner of the screen. Please leave the credit note unpaid.
Applying the Credit Note
You can apply the credit note to the original invoice by navigating to Invoices > Select the invoice.
An Apply Credit button will be displayed within the Payments section at the bottom. Simply click Apply Credit, tick the credit note that you have created and press Apply.
The invoice will now be marked as paid and your accounts will be correct.