Mistakes happen — a wrong amount, an incorrect line item, or a client who needs a partial refund. Here's how to correct an invoice properly.
What is a credit note?
A credit note is a formal document that reduces or cancels the value of a previously issued invoice, without deleting the original record. It's the standard way to correct billing errors after an invoice has already been sent or paid.
When to use a credit note vs. a corrected invoice
If the original invoice hasn't been paid yet and no accounting entry has been made against it, you can often simply void it and issue a corrected version. If it's already been recorded or paid, a credit note is the cleaner, more traceable correction.
What a credit note should include
- A reference to the original invoice number.
- The amount being credited.
- A brief reason for the correction.
- Its own unique credit note number.
Never delete or reuse an invoice number
Even when correcting an error, keep the original invoice number in your records — deleting or reusing numbers creates gaps that complicate bookkeeping and can raise concerns in an audit.
Communicate the correction clearly
Send the credit note to the client with a short note explaining the change, so there's no confusion about why a new document has arrived.
The takeaway
Mistakes are normal — how you correct them, cleanly and traceably, is what actually matters for your financial records.