Credit note

A customer credit memo (or credit invoice) is a document issued by the supplier to cancel or reduce an invoice: due to a pricing error, a return of goods, a discount granted retroactively, or a goodwill gesture.

Example

A customer was billed €1,200 instead of €1,000. The supplier issues a credit memo for €200: the customer now owes only €1,000.

Why It’s Important

A credit memo issued promptly often clears up a pending payment. Tracking credit memos also helps identify recurring billing errors.

For more information: The Guide to Dispute Resolution.

See also: accounting credit, invoice correction, dispute.