Credit note

Finance
Markets Bond Commodity Derivatives Foreign exchange Money Over-the-counter Private equity Real estate Spot Stock Participants Investor institutional Retail Speculator
Instruments Cash Credit line Deposit Derivative Futures contract Loan Option (call exotic put) Security Stock Time deposit (certificate of deposit)
Corporate Accounting Audit Capital budgeting Credit rating agency Risk management Financial statement Leveraged buyout Mergers and acquisitions Structured finance Venture capital
Personal Credit / Debt Employment contract Financial planning Retirement Student loan
Public Government spending Final consumption expenditure Operations Redistribution Transfer payment Government revenue Taxation Deficit spending Budget (balance) Debt Non-tax revenue Warrant of payment
Banks and banking Central bank Deposit account Fractional-reserve banking Loan Money supply Lists of banks
Regulation · Standards Bank regulation Basel Accords International Financial Reporting Standards ISO 31000 Professional certification Fund governance Accounting scandals
Economic history Private equity and venture capital Recession Stock market bubble Stock market crash

^[1] A credit note or credit memorandum (memo) is a commercial document issued by a seller to a buyer. The seller usually issues a credit memo for the same or lower amount than the invoice, and then repays the money to the buyer or sets it off against a balance due from other transactions.

It can also be a document from a bank to a depositor to indicate the depositor's balance is being in event other than a deposit, such as the collection by the bank of the depositor's note receivable.

Features

A credit note lists the products, quantities and agreed prices for products or services the seller provided the buyer, but the buyer returned or did not receive. It may be issued in the case of damaged goods, errors or allowances. In respect of the previously issued invoice, a Credit Memo will reduce or eliminate the amount the buyer has to pay. Note: A Credit Memo is not to be substituted as a formal document. The Credit Memo rarely contains: PO #, Date, Billing Address, Shipping Address, Terms of Payment, List of products with quantities and prices. Usually it references the original Invoice and sometimes states the reason for issue.

This is received if the goods are incomplete, damaged, or incorrect; customers may also receive one if they paid too much money, or if they had been overcharged.

Uses

• To allow the buyer to purchase an item or service from that seller on a future date, i.e. a gift card or store card credit. Credit notes may be issued by a seller as a goodwill gesture to a buyer who wishes to return previously purchased merchandise (instead of cash repayment) in circumstances where the original sales agreement did not include an explicit refund policy for returned items. In such circumstances, a credit note of value equal to the price of the returned item is usually issued allowing the buyer to exchange his purchase for other items available with the sale.

See also

• Accounting
• Credit (finance)
• Debit note

References