You’ve made an invoice and then noticed a mistake on it? You can’t edit invoices, but this is what you can do to fix an invoice mistake.
Maybe you forgot to add those extra hours you worked, or maybe you spelled the client’s name wrong, or added the wrong bank transfer details. Whatever the mistake, it’s actually not possible to edit an invoice.
Why? Invoices are used to calculate and pay taxes and they form part of your bookkeeping—which some businesses are required to do, and all businesses should do in order to keep track of their finances. If you were to be audited by the tax authorities, you’d have to provide your invoices as part of your sales documentation.
But we all make mistakes. More likely than not, at some point you’ll make an invoice with errors on it. When that happens, this is what you can do.
Invoice numbers—what are those?
All your invoices should have a unique invoice number. The line of invoices should be in order, without any gaps in the sequence. If your first invoice has the number 1, the next should have the number 2, then 3 and so on.
This is because it should be possible for someone like the tax authorities to go over your invoices and make sure they have the complete list. You can’t just delete your invoice because it would create a gap in your number sequence.
In many countries, you have to use invoice software or invoice pads/prenumbered paper to create invoices. This is to ensure that each invoice gets assigned a unique, sequential number.
How to cancel an invoice
If you’ve made a mistake on the invoice, you have to make a new invoice with the correct details. But first you should cancel the invoice with the error on it. You do that by crediting the invoice. A credit note annuls the original invoice.
Here’s an example. You create an invoice for 10 hours of consulting work, at 100 dollars an hour, 1 000 dollars in total. After you’ve created it, you remember that you agreed with the client that you were going to give them a 10 percent discount.
You then have to credit that invoice you made. You do that by creating what’s called a credit note. The credit note is a kind of invoice too; in fact it should look exactly the same as your original invoice but show a negative amount—in this case -1 000 dollars. This cancels out the invoice with the error, and the client now owes you 0 dollars.
After you’ve done that, you can create a new invoice with the agreed 10 percent discount, 900 dollars in total. Your bookkeeping will now be correct and complete.
What’s the easiest way to credit the invoice?
If you use free invoice software like Conta, there’s a button to credit the invoice. Conta will then automatically create a credit note for you, and link the original invoice and the credit note together so you can easily go back to them later.
This is how you credit an invoice in Conta.
You can create a credit note using an invoice template or an invoice generator, but you cause all sorts of trouble if you make mistakes on the credit note too, and you have to make sure to create it exactly the same as your original invoice.
That’s why we recommend using invoice software to make sure it’s all in order and you comply with rule and regulations. We’ve tested the top 5 online invoice creators.
What if I’ve sent the invoice with the error to my client?
If you sent the erroneous invoice to your client, you have to send them the credit note too. This is because they need both for their accounts—proof that you claimed payment, and proof that you then cancelled that payment.
Providing them with a credit note when you’ve made a mistake also shows professionalism. Make sure to state the reason for the credit note in the email, and attach the new and correct invoice too. This is part of building good customer relationships.
