Free Credit Note Generator
Issue a credit note in seconds to cancel or reduce an invoice, for a return, an overcharge, a discount, or a cancelled order. Reference the original invoice, list the items, watch the live preview, and download a clean PDF. No sign-up, no watermark.
This credit note reduces the amount owed on the referenced invoice.
Live preview of exactly what your PDF looks like.
What a credit note is
A credit note (sometimes called a credit memo) is the document a seller issues to reduce or cancel an amount that was already invoiced. Think of it as the reverse of an invoice: where an invoice says “you owe me this,” a credit note says “ignore this much of what I billed you.” It is the correct, auditable way to fix a bill after it has been sent, without deleting or editing the original invoice.
A complete credit note shows:
- The words “Credit Note” and a unique credit note number
- Your details as the seller, and the customer's details
- The date, and a reference to the original invoice
- The reason for the credit (return, overcharge, cancellation)
- Each item being credited, with quantity and price
- The subtotal, any tax reversed, and the total credited
When to issue a credit note
You issue a credit note whenever the amount on an invoice needs to come down after the invoice has gone out. The most common reasons are:
- Returned goods. The customer sends items back, so you credit their value.
- An overcharge or error. The invoice billed too much, the wrong rate, or a duplicate line.
- A discount after the fact. You agree a reduction once the invoice is already raised.
- A cancelled order. Work or goods are cancelled after invoicing, so the charge is reversed.
- Damaged or faulty items. The customer keeps the goods but you credit part of the price.
In every case, the rule is the same: do not edit or delete the original invoice. Leave it as it is and issue a separate credit note against it, so your invoice numbering stays unbroken and your accounts show exactly what happened.
Credit note vs invoice, refund, and debit note
These four get mixed up, so here is the plain-English difference. An invoice requests payment. A credit note reduces or cancels an amount already invoiced. A refund is the actual money moving back to the customer, which is one way of settling a credit note, the other being to offset it against their next invoice. A debit note is usually raised by the buyer to request a reduction, or by a seller to increase an amount, and is far less common in everyday small-business billing.
For the wider family of billing documents, see our guide on the what a credit note is and the difference between an invoice, receipt, and bill.
How to write a credit note
Fill in your business and the customer, give the credit note its own unique number (a simple CN-001, CN-002 sequence works, kept separate from your invoice numbers), and set the date. Reference the original invoice number so anyone reading it, including your customer’s accounts team, can match the credit to the exact bill it corrects. List only the items being credited with their quantities and prices, pick the reason, and if the original invoice charged tax, enter the same rate so the tax is reversed in proportion. The total is the amount credited. Download the PDF and send it the same way you sent the invoice.
Tax on a credit note
A credit note reverses tax the same way the invoice charged it. If you billed VAT, GST, or sales tax on the original invoice, the credit note credits both the net amount and the tax, so your tax records stay correct and you are not left having paid tax on money you gave back. Enter the same tax rate that was on the invoice and the tool calculates the reversed tax on the credited lines. If you need to work a rate out, our VAT and GST calculator handles it.
From invoice to credit note
A credit note only exists because an invoice came first. If you still need to raise the original bill, use our free invoice generator. When a payment has been made, record it with a receipt, and to quote a job before you start, use the quote generator. All free, no sign-up.
Frequently asked questions
What is a credit note?
A credit note is a document a seller issues to a buyer to reduce or cancel an amount that was already invoiced. It is the opposite of an invoice: an invoice requests payment, a credit note gives value back or writes it off. Credit notes are used for returned goods, an overcharge, a post-sale discount, a cancelled order, or faulty items.
How do I write a credit note?
Enter your business and the customer, give the credit note a unique number and date, and reference the original invoice it relates to. List the items being credited with their quantities and prices, add the reason, and the tax if the original invoice charged it. The total is the amount credited back. Download it as a PDF and send it to the customer.
What is the difference between a credit note and an invoice?
An invoice is a request for payment; a credit note reduces or cancels a payment already requested. If an invoice was for too much, or the customer returned goods, you issue a credit note for the difference rather than editing the original invoice, which keeps your numbering and records intact.
Is a credit note the same as a refund?
No. A credit note is the document that records the reduction; a refund is the actual money going back. A credit note can be settled either by refunding the money or by offsetting it against a future invoice, so the customer pays less next time. The note is the paperwork, the refund is one way of settling it.
What is the difference between a credit note and a debit note?
A credit note is issued by the seller to reduce what the buyer owes. A debit note is usually raised by the buyer to request a reduction, or by the seller to increase an amount. In everyday small-business use, the seller issues a credit note to correct or cancel a charge.
Do I charge tax on a credit note?
If the original invoice charged VAT, GST, or sales tax, the credit note reverses that tax in the same proportion, so both the net amount and the tax are credited back. Enter the same tax rate that was on the invoice and the tool works out the tax on the credited amount for you.
Is this credit note generator free?
Yes, completely free with no sign-up, no watermark, and no limit. Everything you type stays in your browser and is never uploaded, so your figures stay private.