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How to raise a customer credit note before an invoice is paid

If you want to create a credit note against one of your issued invoices that is yet to be paid, has incorrect information, or perhaps is a duplicate of another invoice, simply navigate to the ‘Sales’ tab and then to the ‘Invoices’ sub-tab underneath. This will present all of your invoices.

Now navigate to the ‘Options’ menu of the relevant invoice. From here, you’ll be presented with two options, depending on whether you want to credit note a partial amount, or the full amount of the invoice. 

Option 1:
If you’re looking to partially credit note an invoice, you should select ‘Raise Credit Note’. 

This will allow you to enter a specific amount you want to credit note against the invoice whilst, leaving the remaining amount outstanding. If you need this option, please see option 2 below for the remainder of the process.

Option 2:
If you’re looking to credit note the entire invoice, and remove all tax liabilities, you should select ‘Raise full credit note’ instead.

Once you’ve done this, a pop-up box will appear asking “If you’re sure”. Once you press “OK”, it all done!

Please note: You should be aware that invoices work on an “Accrual Accounting” system. This simply means that your invoices automatically accrue Corporation Tax on them, regardless of whether it's paid or not. 

Tip: It’s extremely important to remember this when it draws closer towards your year-end, as any duplicate/incorrect/error invoices will be taxed regardless of whether you’re receiving payment for it. 

If you're here because you neededOption 2”, don’t worry - all the details you need are available below.

Select the ‘Options’ menu and ‘Raise credit note’ against the relevant invoice and you’ll be presented with the "New Credit Note" form. 

From here, enter the “issue date” using the ‘same as invoice’ button, provide a reason for the credit note, and the “net amount” that you wish to credit.

Please note: If you’re VAT Registered, Crunch will automatically add VAT on top of the credit note. You’ll need to enter the ‘net amount’ (the amount minus the VAT) and crunch will calculate the 20% on top automatically once you raise it.

In our example, we're saying that the client has to pay us £300 less than originally stated, so our form looks like this:

Clicking on ‘Raise credit note’ will then display that a “Draft credit note” has been created. Against the invoice, you'll see some blue writing under the “Credit notes” column refers to the amount and number of credit notes placed against the invoice:

To issue the credit note, click the blue text to be taken to the "Invoice Summary" page.

Here you can click the ‘Options’ button next to the relevant credit note at the bottom of the screen and select ‘Issue’. This will present you with a final chance to check the information, the amount, the date, and so on before you officially raise this credit note. 

You can choose to edit it, email the credit note to your client as well as issuing it, or simply issue it. Once you've issued your credit note, you’ll see a confirmation note at the top, and the credit note information at the bottom should now say “settled”.

If you then go back to the invoices tab, you’ll see that the partial amount has been removed from the invoice with the remainder showing as outstanding.

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Last Updated: 01 Oct 2019 08:41AM BST
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