Credit note: when and how do you create one?

A wrong amount, the wrong customer, or a customer returning goods: invoices don't always turn out to be correct afterwards. However, you never simply edit a sent invoice — instead, you issue a credit note, also called a credit invoice.

What is a credit note?

A credit note is essentially an "invoice in reverse": a document that fully or partially corrects a previously sent invoice. The amounts are shown with a minus sign, so that both your books and your customer's books are correct again.

When do you need a credit note?

• Incorrect invoice: wrong amount, wrong VAT rate, or wrong customer details
• Return: the customer sends back (part of) the order
• Discount granted afterwards: for example, a goodwill discount after a complaint
• Cancelled order: the work is (partly) no longer going ahead after the invoice has already been sent
• Writing off a bad debt: a customer consistently doesn't pay and you write off the receivable in your records

Note: small, one-off typos that the customer hasn't processed yet are often easier to fix by crediting the original invoice and, in the same step, sending a new, correct invoice.

What must be on a credit note?

A credit note essentially contains the same details as a regular invoice, with one crucial difference: a clear reference to the number and date of the original invoice being corrected. Without that reference, neither you nor the Tax Authority can trace which invoice the credit note belongs to.

As with a regular invoice, you also issue the credit note its own sequential number from your numbering series (often with a clearly recognisable prefix such as "CN-"), and you state the amounts as a negative figure or explicitly as "credit".

How does the VAT correction work?

If you charged VAT on the original invoice, you correct this VAT through the credit note. You process this amount in the VAT return for the period in which you send the credit note — not by revising the old return. This keeps your VAT records consistent and correct per period.

Always send a credit note as soon as possible after the reason for it arises. The longer you wait, the greater the chance the correction ends up in a different VAT period than the customer expects, which can create confusion for both parties.

Credit note versus new invoice

Use a credit note to correct an existing invoice, and only send a new, correct invoice afterwards if there's still a remaining amount to be billed. Never send an "amended version" of the original invoice with the same number — that isn't allowed for bookkeeping purposes.

Record-keeping obligation

A credit note falls under the same record-keeping obligation as regular invoices: keep it for at least 7 years as part of your records.

In FactuurMakenOnline, you create a credit note with one click, directly from the original invoice — the reference and VAT correction are filled in correctly for you automatically.