Credit Note
A credit note, also known as a credit memo, is a document that is issued by a seller to a buyer. The purpose of the credit note is to notify the buyer that a certain amount has been credited to their account. This can be due to one of several reasons, such as returning merchandise, receiving a discount, or correcting an invoicing error.
When merchandise is returned, the seller will issue a credit note for the value of the returned goods. The buyer will then use this credit note when making their next purchase from the seller.
Discounts are often given to buyers who pay their invoices early. In this case, the seller will issue a credit note for the value of the discount. The buyer can then apply this credit towards future purchases.
If an invoicing error is made, the seller will issue a credit note for the incorrect amount. The buyer can then apply this credit towards future purchases or request a refund from the seller.