If you're here, it's because you'd like to learn more about credit notes. The anti-VAT fraud law has considerably tightened invoicing conditions. Indeed, it notably prohibits modifying an invoice after its issuance. This is when the credit note comes in! So, what is a credit note? What are the different types of credit notes? What are its characteristics and how to number them? You will find all the answers to these questions in this article. The entire Flexina team wishes you a good read. Follow the guide!
What is a credit note?
Before knowing how to create a credit note, it's important to explain concretely what a credit note is (also called credit note): a credit note is a cancellation invoice. In France, it's forbidden to delete invoices that have been finalized. This is when a credit note can come into play. The latter will be proof for justice if you ever want to modify an invoice. But concretely, when can it be used? You're probably asking yourself the question. It can intervene during various events such as:
- a return of goods (partial or in its entirety);
- the observation of one or more errors during invoice issuance;
- an omission of discount granted following invoicing;
- a conditional discount;
- a cancellation of the invoice or certain tasks to be performed;
- a rebate, etc.
What are the different types of credit notes?
There are 3 types of credit notes. We list them here:
- The commercial credit note: this is used to take into account modifications of the commercial relationship. It allows resolving disputes such as a delivery delay, a return of goods following customer dissatisfaction with the quality of a product, etc
- The credit note for error: after issuing an invoice, it may happen to realize having made one or more errors during its editing. In that case, the issuer must issue a credit note to correct them;
- The credit note for cancellation: if you need to modify the entirety of an invoice (order cancellation, recipient change...), creating a credit note for cancellation will prove essential. It can also be used to invoice additional work following a customer's request, and they want a single invoice.
Characteristics of a credit note
- the issuance deadline: it should be issued as soon as an event (a return, a rebate or even a cancellation) is observed;
- the number: it's not recommended to issue too many credit notes, as this helps facilitate payment tracking. However, legally, it's perfectly possible to issue as many credit notes as desired;
- validity period: the prescription for claiming a credit note is 5 years in commercial matters, unless contrary mentions have been mentioned in the sales conditions;
- retention period: like classic invoices, the retention time for credit notes is 10 years;
- settlement: it's perfectly conceivable to use a credit note to get reimbursed or by using it as a reduction on a future invoice, for example.
The mandatory mentions of an invoice are similar to those present on a credit note.
Show VAT on credit note invoices | Yes or no?
Regarding VAT, you must show it on the credit note, as it refers to the classic invoice. Moreover, the amount of VAT to collect is also subject to cancellation.
Delete a credit note | Good or bad idea?
Of course, it's impossible to delete an invoice. Once it has been issued, it must continue to exist. The same goes for credit notes. Throwing away an invoice will create a hole in the numbering and you know... This is strictly forbidden. If you have issued a credit note by mistake, you must cancel it by creating a new invoice.
Numbering credit notes | How to do it?
A credit note is an invoice. They follow the same numbering regulations as your invoices. Your invoices must follow a chronological order, continuous and without interruption. They cannot have the same number. This numbering is mandatory and necessary to uniquely identify each of your invoices.
You may have already made some numbering errors on your old credit notes on Excel or on your old invoicing software? Flexina will help you by managing the continuous and chronological numbering of your invoices and credit notes for you.
Anyway, it's always important to issue good invoices. Why? This will allow you to have proper accounting, but not only... During an unexpected inspection, this will also allow you to be more serene. Our online invoicing software can help you manage your accounting while respecting current regulations. Think about it!
Creating a credit note is essential to modify or cancel an invoice. Our online invoicing software has all the functionalities you need. You can finally ensure your company's accounting and financial management as it should be, and this, from anywhere in the world. You can come test our software for 15 days to get a more precise idea. It's totally free! If you have questions or even need tips, you can contact us by phone or email. We will respond to you as soon as possible. The Flexina team wishes you a great discovery.
