What this screen is for
A credit note is the counterpart to an invoice. Where an invoice increases what a customer owes, a credit note reduces it. It is the correct way to handle goods coming back, a price billed too high, or an allowance agreed after the fact.
Why not just edit the invoice
Once an invoice has been issued — and especially once it has been reported for tax — changing it rewrites history. A credit note leaves the original intact and records the correction as its own dated document, which is what both your books and a tax audit expect.
Related
- Refund Receipts — when money actually goes back to the customer
- Delayed Credits — credits agreed but not yet issued