Credit Note Template
A credit note cancels or reduces an invoice you've already issued — for a return, overcharge or cancellation. It's not just a negative invoice: it must reference the original invoice, state the reason, and carry its own number for clean bookkeeping and tax. This template does all three.
Last reviewed 2026-07-08
Template preview
- From:
- Your Business · you@email.com
- To:
- Client Name · client@email.com
- Credit note #:
- CN-0021
- Against invoice:
- INV-0188 (2026-06-20)
- Date:
- 2026-07-08
| Description | Qty | Unit price | Amount |
|---|---|---|---|
| Returned item — Product A | 2 | $50.00 | −$100.00 |
| Overcharge correction — shipping | 1 | $15.00 | −$15.00 |
| Subtotal credited | −$115.00 | ||
| Tax credited | −$9.20 | ||
| Total credit | −$124.20 | ||
How to fill in each field
Original invoice reference
Always cite the invoice number and date the credit note corrects.
Common mistake: No reference to the original invoice, breaking the audit trail.
Reason for credit
State why (return, overcharge, cancellation) per line for records and tax.
Common mistake: Issuing a credit with no reason, which auditors flag.
Unique credit note number
Give the credit note its own sequential number, separate from invoices.
Common mistake: Reusing the invoice number, confusing the books.
Tax credited
Reverse the tax proportionally so your tax records stay correct.
Common mistake: Crediting the net but forgetting the tax portion.
Related templates & variants
A credit note reverses an invoice. To bill in the first place use the invoice template; to confirm a payment received use the receipt template.
Download a professional invoice template in Word, Excel, CSV or Google Docs.
A free receipt template confirming payment received — items, amount paid, method and date. Download in Word or Excel with a field-by-field guide.
An ecommerce invoice template for online store orders — SKUs, shipping, discounts and tax. Download in Word or Excel with a field-by-field guide for sellers.
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Frequently asked questions
What is a credit note?+
A credit note is a document issued by a seller to cancel or reduce a previously issued invoice — for returns, overcharges or cancellations. It references the original invoice and reverses the relevant amount, including tax.
What should a credit note include?+
Your business and the customer, a unique credit note number, the original invoice reference and date, the items and reason for the credit, the amount credited and the tax reversed.
Is a credit note the same as a refund?+
Not exactly. A credit note reduces what the customer owes (or records a credit for future use); a refund is the actual return of money. A credit note often precedes or documents a refund.
Sources & further reading
- What is a credit note in accounting? (Stripe)— stripe.com
- Credit note: meaning, format & examples (Zenskar)— zenskar.com
We review authoritative guidance when building each template. Links are for reference only.