A credited invoice is an invoice that contains errors and has therefore been reversed or “zeroed out”.
If you have managed to send two invoices instead of one, made a pricing error, or something else in an invoice you have sent out, you cannot simply delete it, but you must credit the invoice.
What does it mean to credit an invoice?
Everything in an accounting must be traceable, and therefore you cannot simply delete an invoice if it is incorrect. In order for it to be correct, you must credit the invoice and create a credit note.
To credit an invoice means to cancel it or zero out the amount stated on the invoice with errors. The invoice will then be recorded as a credited invoice in the accounting, and it will not be considered as something you should receive payment for.
To credit an invoice, you must create a credit note that credits it. A credit note is simply proof that the invoice is no longer valid and that all or part of the amount owed has been credited.
What is a credit note?
When you credit an invoice, a credit note should also be created. In most accounting programs, this happens automatically when you credit an invoice. It is used when you have posted an invoice completely or partially incorrectly. A credit note is then proof to the customer that the invoice is no longer valid. If the customer has already paid the invoice, the customer has a credit balance.