Creating and Closing a Credit Note

Creating a New Credit Note

You can create a credit note from three different places within Zoho Billing.

From the Credit Notes Module

Navigate to Credit Notes.
Click the + button adjacent to Credit Note or click + New on the top right corner.
Enter the details of the credit note in the creation form.
Click Save as Draft to save the credit note as a draft.
You can also mark the Credit Note as Open by clicking Save as Open

From the Invoices Module

You can also create a credit note directly from an invoice for the customer to whom you want to issue credits.

Navigate to Invoices.
Go to the invoice of the customer for whom you want to issue credits.
Click More and select Create Credit Note.

Alternatively, you can also create a credit note by just clicking + New dropdown on the top right corner and selecting New Credit Note.

From the Customers Module

Credit notes can also be created by selecting a customer from the Customers tab. Select New transaction > Credit Note and proceed to create the credit note. You can view and edit these credit notes anytime by clicking Edit.

Closing a Credit Note

There are two ways by which you can close a credit note:

Apply to Invoice

Credits that belong to a customer can be applied to an invoice that you’ve raised for the same customer. When applied, it will reduce the invoice amount accordingly.

To apply credits to an invoice:

Navigate to Credit Notes.
Select the credit note that you want to apply to an invoice. Make sure that the invoices are in Sent status and the credit note is in Open status.
Click Apply to Invoice on the top.
A list of invoices that you’ve created for that customer is displayed.
Specify the amount to be applied for the invoices and click the Save button.
The invoice amount and the available credit will be reduced accordingly.
If all the credits are used up, the status of the note will be changed to Closed.

This can also be done by opening the corresponding invoice and clicking Apply Now under the Credits Available.

Refund

If you’ve refunded the amount you owed your customer by cash, you can record this in Zoho Billing against the corresponding credit note created. To do this:

Navigate to Credit Notes.
Open the respective credit note and ensure it is in Open status.
Click Refund.
Choose the date on which it was refunded, the payment mode, reference number (if any), the amount to be refunded and hit the Save button.

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