Credit note: definition, example, and why it matters

A credit note (or credit memo) is the opposite of an invoice — it cancels or reduces a charge. Issued for returned items, overbilling, or post-invoice discounts. The buyer applies it against an open invoice or holds it for future purchases.

• Short definition. A document issued by a seller that reduces the amount a buyer owes.
• Category. Credit note is a invoicing term used by service businesses when billing customers.
• How Glo Invoice handles it. Glo Invoice builds credit note into the invoice itself, so you don't track it on paper or in a spreadsheet.

Frequently asked questions

What does credit note mean?

A credit note (or credit memo) is the opposite of an invoice — it cancels or reduces a charge. Issued for returned items, overbilling, or post-invoice discounts. The buyer applies it against an open invoice or holds it for future purchases.

Related terms

• Invoice — A document a business sends a customer requesting payment for goods or services.
• Refund — Returning money to a customer for a paid invoice or a portion of it.
• Void invoice — An invoice cancelled by zeroing its total while keeping its record.