Complete guide to creating credit notes for returns, refunds, and invoice corrections
Start NowOpen Billmator → Credit Note → Select original invoice from list. App imports all invoice details automatically.
Important: Credit note MUST reference an existing invoice. Cannot create standalone credit note for GST compliance.
Full return: Select all items. Partial return: Select specific items and enter return quantity.
Example - Full Return:
Invoice had: 100 laptops. Return all 100. Select all items.
Example - Partial Return:
Invoice: 100 laptops. Return only 10 (damaged). Select laptop item, qty: 10
Select reason: Product Return, Damaged Goods, Post-Invoice Discount, Invoice Error, Quality Issue, Others. Add detailed notes.
App automatically calculates reversed GST based on credit amount. Review: Base amount, CGST/SGST/IGST reversed, Total credit.
Example: Invoice: ₹1L + ₹18k GST. Return: ₹20k items. Credit: ₹20k + ₹3.6k GST = ₹23.6k total credit
Generate credit note PDF. Send to customer. Then choose: Immediate refund OR Adjust credit against next invoice.
Option 1: Immediate Refund
Transfer credit amount back to customer. Settlement complete. Mark as "Refunded"
Option 2: Future Adjustment
Keep credit on account. Next order: Auto-deduct credit. Mark as "Adjusted"
Invoice: 100 units @ ₹1k = ₹1L. Customer reports 15 damaged. Issue credit for 15 units = ₹15k + ₹2.7k GST. Refund ₹17.7k or send 15 replacement units.
Sent invoice ₹1L. Customer negotiates 10% discount after. Issue credit note for ₹10k (10% discount). Customer pays ₹90k instead of ₹1L.