Free Credit Note Template for Excel
Download our FREE Credit Note Template for Small Business owners and Individuals
Need to send a credit note to your clients? Download our CFO360 credit note template to send to your clients. It’s easy to use and can be edited to suit your company’s brand.
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Below we will cover some topics and common questions on Credit Notes. Feel free to jump to any section that interests you:
- What is the purpose of a credit note?
- Why do you need a credit note?
- Is a credit note a refund?
- What are the essentials to include on a credit note?
- How to create a credit note using our free credit note template
- Examples of credit notes
- What is the purpose of a debit note?
- When to issue a debit note
What is the purpose of a credit note?
Invoice mistakes happen to everyone – even those who are meticulous about staying on top of things and that is why you need our free credit note template for Excel.
The cancellation of a previous invoice is possible through the use of credit notes, similarly credit notes are like a kind of receipt, which serves as an invoice for credit.
When you issue a credit note it grants you permission to wipe out the total of the invoice from your accounting records, in other words without completely wiping out the actual invoice.
The deletion of invoices can be unlawful in countries that legally require businesses to maintain reliable audit trails. Credit notes are legal documents.
Why do you need a credit note?
- The original invoice had an error in price.
- The customer has paid more than the invoice amount.
- The products are damaged during transportation.
- The customer has given back products.
- The customer did not approve of your services.
What are the essentials to include on a credit note?
-The common form of a credit note is very much like that of a quote and an invoice however, the layout and style is not as stringent as an invoice.
-Your credit note must display all the relevant details for accounting and administration reasons for your customer as well as for your business.
Below we have a breakdown of the required essentials :
According to SARS these details are the requirement to have on your credit note:
- Your company details (Name, address, and VAT registration number, etc.)
- The words “Credit Note” Clearly indicated on the document
- The date when the credit note is issued.
- The credit note number.
- Your original invoice number as a reference.
- Your customer’s details. (Name, address, and VAT registration number, etc.)
- Reasons you are issuing the credit note.
- Breakdown of the goods or services supplied and pricing.
Does your original tax invoice include VAT?
Yes? You must then create a VAT credit note to match the original invoice.
Your VAT credit note should display all the information on the invoice and the price before VAT.
How to create a credit note using our Excel credit note template :
- Company Logo: There is a space provided on the credit note template for you to place your companies logo.
- Company details: List all of your companies details.
- Date: Fill in the date that you are creating the credit note.
- Credit note number: Complete the credit note number.
- Invoice reference: Fill in the invoice reference number.
- Customer details: List as many of your customer’s details as possible.
- Item: Type in the item.
- Description: Type in the description of the goods or services supplied.
- Quantity: Type in the quantity.
- Unit price: Type in the unit price.
- Discount: Enter a discount percentage if applicable.
- VAT Rate: We have inserted the excel formulas onto the template and the amounts will be calculated automatically.
- Line Total: Here we have also inserted the excel formulas, in other words, the calculations will automatically be done for you.
Find illustrations below of our free credit note template for excel :
Is a credit note a refund?
Credit notes are an easy way to keep customers satisfied when items do not match their expectations. In addition, you can offer a refund or just give them immediate credit for future purchases.
“The word accounting comes from the word accountability. If you are going to be rich, you need to be accountable for your money.”Robert Kiyosaki
Some examples of credit notes
The procedure of creating a credit note against an invoice is relatively simple, in addition the client must receive a copy of the credit note and your company should also keep a copy on file.
- Customer X purchases goods to the value of four hundred and fifty rands from Company Y. Customer X contacts Company Y to inform them that there is an error in the price on the original tax invoice. Company Y issues a credit note to rectify the error.
- When Customer X makes a payment towards the original invoice he makes a mistake and pays four hundred and sixty rands which is ten rands more than the value of the invoice. Company Y issues a credit note for the difference of ten rands.
- The courier company transporting the goods on behalf of Company Y informs them that their vehicle transporting the goods has been involved in an accident and the goods are damaged. The standard procedure that Company Y follows is to pass a credit note to Customer X for the full invoice amount.
- Upon receiving the goods Customer X notices some unacceptable flaws and returns the goods to Company Y for a full refund of the purchase price.
- Company Y has completed the job, but Customer X is not satisfied with the services, therefore a credit note is issued for a discount of 15% on the final invoice amount to Customer X.
What is the purpose of a debit note?
A debit note is a business financial document that is an instruction to credit their account from the buyer to the seller. The buyers and sellers alike use credit and debit notes to keep a record of the outstanding cost.
When to issue a debit note :
- When there are defects or damage in the goods received from the supplier.
- You have charged the customer more than the initially agreed price.
- The amount on the invoice is incorrect.
A debit note received from a buyer :
- A debit note is generated from the buyer to the seller relating to a tax invoice that has already been issued. It displays a correction in the total amount and is referred to as the buyer’s credit while the seller receives a debit.
- We typically generate a debit note when portions of the consignment delivered are damaged and it, therefore, has to be given back to the seller.
- The buyer will also create a debit note when the seller does not deliver products or services by a specific date and time.
Example: Company X buys 5000 paper cups from Company Y on credit at a pre-agreed cost of R1.00 per paper cup. Company Y supplies and delivers the 5000 paper cups and issues an invoice for the amount of R5000. Company X discovers that 400 of the paper cups are flawed and cannot be used.
A debit note is processed by Company X and is sent to Company Y together with the 400 flawed paper cups whereby they request that Company Y debit the total amount of the invoice by R400.