To cancel an invoice, you have to create what’s called a credit note. The credit note is a negative invoice.
If you’ve made an error on an invoice, or you’ve created a duplicate invoice, you can create a credit note to cancel it out. It is a document that proves that the original invoice is no longer valid.
If you created an erroneous invoice for $500, the credit note will say -$500.
If you’ve sent the erroneous invoice to your client, make sure to send them this document too.
When should I create a credit note?
There are many reasons to create one—but they all boil down to wanting to annul the invoice. Here are some common reasons:
- You entered the wrong price
- You entered the wrong client
- You accidentally created a duplicate invoice
- You forgot to add a discount
- You entered the wrong payment details
After you’ve annulled the invoice, you can create an invoice without errors.
There are some exceptions: If you entered the wrong due date on the invoice, you can fix it by communicating with the client—ideally in writing—to confirm the correct due date.
Why can’t I just delete the invoice?
Invoices should be numbered in ascending order, if your first invoice is 1, the next one will be 2, then 3, and so on. This is because it should be possible for a third-party, for example an auditor, to go over your sales documentation and know they have the complete information.
If you could delete invoices, there would be gaps in your sequence. In many countries, you have to use invoicing software or numbered invoice pads/books to make your invoices, so that they’ll automatically be assigned a unique invoice number.
This is how to create a credit note when you use the free invoice software from Conta.
