documentation/content/applications/finance/accounting/customer_invoices/credit_notes.rst

========================
Credit notes and refunds
========================

A **credit note**, or **credit memo**, is a document issued
to a customer that notifies them that they have been credited
a certain amount.

There are several reasons that can lead to a credit note, such as:
   * a mistake in the invoice
   * a return of the goods, or a rejection of the services
   * the goods delivered are damaged

.. note::
   Issuing a credit note is the only legal way to cancel,
   refund or modify a validated invoice. Don’t forget to
   *register the payment* afterward if you need to send money
   back to your customer.

Issue a Credit Note
===================

You can create a credit note from scratch by going to
:menuselection:`Accounting --> Customers --> Credit Notes`,
and by clicking on *Create*. Filling the Credit Note’s form
works the same way as the Invoice’s form.

However, most of the time, credit notes are generated directly
from the invoices they are related to.

To do so, open the *Customer Invoice*, and click on *Add Credit Note*.

.. image:: credit_notes/credit_notes01.png
   :align: center

You can choose between three options:
   - Partial Refund
   - Full Refund
   - Full refund and new draft invoice

.. note::
   Credit Notes’ numbers start with “R” and are followed by the
   number of the document they are related to (e.g., RINV/2019/0004).

Partial Refund
--------------

Odoo creates a draft credit note already prefilled with all the
necessary information from the original invoice.

This is the option to choose to do a partial refund, or if you
want to modify any detail on the credit note.

.. note::
   This is the only option available for invoices that are already marked as *Paid*.

Full Refund
-----------

Odoo creates a credit note, automatically validates it, and
reconciles the original invoice with it.

.. image:: credit_notes/credit_notes02.png
   :align: center

This is the option to choose to do a full refund or cancel
a validated invoice.

Full refund and new draft invoice
---------------------------------

Odoo creates a credit note, automatically validates it, reconciles
the original invoice with it, and open a new draft invoice
prefilled with the same details from the original invoice.

This is the option to choose to modify the content of a validated invoice.

Record a Vendor Refund
======================

**Vendor Refunds** are recorded the same way you would do with invoices’ credit notes:

You can either create a credit note from scratch by going
to :menuselection:`Accounting --> Vendors --> Refund`, and
by clicking on *Create*, or by opening the validated *Vendor Bill*,
and clicking on *Add Credit Note*.

Journal Entries
===============

Issuing a credit note from an invoice creates a **reverse entry**
that zeroes out the journal items generated by the original invoice.

Here is an example of an invoice’s journal entry:

.. image:: credit_notes/credit_notes03.png
   :align: center

And here is the credit note’s journal entry generated to reverse
the original invoice above:

.. image:: credit_notes/credit_notes04.png
   :align: center