How to Create and Apply Credit Notes in CrmLeaf
All editions. Core feature - no add-on required.
Availability: All editions. Core feature - no add-on required.
Overview
A credit note records an amount owed back to a client - for example after an over-billing, a return or an agreed reduction. In CrmLeaf you can create a credit note, apply it against an invoice to reduce the balance, convert it into an invoice, and download it as a PDF.
How It Works
You raise the credit note against the client, then decide how it is used: applied to an outstanding invoice or converted into an invoice.
Create credit note → Apply to invoice → Invoice balance reduces → Download PDF
- A credit note can be applied to an invoice, reducing the amount outstanding on it.
- A credit note can be converted into an invoice where that is the agreed treatment.
- A credit note can be downloaded as a PDF for the client's records.
- A recorded Payment can be linked to a credit note, alongside invoices, orders and projects.
Who Can Use This Feature?
User
- Create a credit note for a client.
- Apply a credit note to an outstanding invoice.
- Convert a credit note into an invoice.
- Download the credit note PDF.
Access depends on the modules and role assigned by your Administrator.
Prerequisites
- The client record must exist.
- To apply a credit note, an invoice for that client with an outstanding balance must exist.
- Currencies and tax rates must be configured.
For Users
Step 1: Open the Credit Note screen
What to do: Review the existing credit notes for the client so you do not raise a duplicate credit.
What to verify: No credit note already covers the same adjustment.
Step 2: Create the credit note
What to do: Select Add. Select the client and the currency, add the line items that make up the credit, and apply the tax rates that apply. Complete every mandatory field, then select Save.
What to verify: The credit note total is the amount you intend to credit.
Step 3: Apply the credit note to an invoice
What to do: Apply the credit note to the client's outstanding invoice so the invoice balance is reduced by the credited amount.
What to verify: Open the invoice and confirm the outstanding balance has reduced, and that the status reflects whether an amount is still due.
Step 4: Or convert the credit note into an invoice
What to do: Where the agreed treatment is to re-bill rather than credit an existing invoice, convert the credit note into an invoice.
What to verify: The new invoice appears in Sales → Invoices with the expected amount.
Step 5: Share the credit note
What to do: Select Download to produce the credit note PDF for the client's records.
What to verify: The PDF shows the correct client, line items and total.
Field and Option Reference
| Field / Option | Description | Required |
|---|---|---|
| Client | The client the credit is owed to. | Yes |
| Currency | The currency the credit note is raised in. | Yes |
| Line items | The items or amounts making up the credit. | Yes |
| Tax | Named tax rates applied per line item. | No |
Expected Result
The credit note is saved and appears in Credit Note. When applied to an invoice, the invoice's outstanding balance is reduced by the credited amount. A PDF of the credit note is available to send to the client.
Service Organisation Context
Credit notes are how a service organisation records the commercial outcome of a billing dispute: hours billed that the client will not accept, a write-off agreed to protect a relationship, or a correction after a rate was applied wrongly. Applying the credit to the outstanding invoice keeps the receivable accurate, and the credit note itself becomes the record of what was conceded and why — which is the figure a firm needs when it reviews whether an engagement was really priced correctly. The same document serves any business crediting a returned item or an over-billing.
Important Notes
- Menu names and their position can differ between product editions and can be customised for your account, so your sidebar may not match these paths exactly. Use Search or your Quick Access items if you cannot find a screen.
- A credit note is not a payment. It reduces what the client owes rather than recording money received.
- A credit note raised for a client is separate from a vendor credit, which belongs to the procurement side of the system.
- Apply a credit note to the correct invoice. Applying it to the wrong invoice misstates both balances.
Common Scenarios
Example: correcting an over-billing. An invoice was raised for more hours than were approved. You issue a credit note for the difference and apply it to the invoice, so the client pays the corrected amount.
Example: crediting a returned item. A client returns part of a delivered order. You raise a credit note for those line items and apply it against the outstanding invoice.
Troubleshooting
| Issue | Possible Cause | Resolution |
|---|---|---|
| The invoice balance did not change | The credit note was created but never applied to the invoice | Apply the credit note to the invoice. |
| No invoice is available to apply the credit note to | The client has no invoice with an outstanding balance | Apply the credit against a later invoice, or convert the credit note into an invoice if that is the agreed treatment. |
| The credit note is in the wrong currency | A different currency was selected from the one on the invoice | Correct the credit note so the currency matches the invoice being credited. |
Frequently Asked Questions
Can a credit note become an invoice?
Yes. A credit note can be converted into an invoice.
Does applying a credit note mark the invoice as paid?
It reduces the outstanding balance. The invoice reaches paid only when nothing remains outstanding.
Can I send the credit note to the client?
Yes. Select Download to produce the credit note PDF.
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