What are credit notes for?
If you owe your customer money, you’ll need to keep a record of that in your books. There are many cases where you might owe your customer money. For example:
- A customer has overpaid you
- You’ve agreed to reward a customer as part of a loyalty program you have
- A customer wants to return a purchase and is asking for either a refund or credit for future purchases.
In such situations, you will issue a credit note to your customer.