# Credit notes and adjustments

> Lower what a customer owes with a credit note, close a balance you will not collect with a write-off, and see how each shows on the invoice.

Source: https://support.billingmart.com/invoices/credit-notes
Updated: 2026-10-17 · Applies to: Web · Section: Invoices & estimates

A credit note lowers the balance a customer owes on an invoice you have already sent. No money moves. It is how you give an allowance, a discount or a goodwill amount after the invoice is out, because a sent invoice cannot be edited and a line cannot be negative. A write-off closes whatever is left when you decide not to collect it.

## Before you use it

Credit notes and write-offs are for owners and admins. They are part of the plans that include credit notes and write-offs. On other plans you see a message that the feature is not part of the workspace's plan, and nothing is changed. You are also asked to confirm it's you with a recent sign-in, and a second-step code if your account has one.

## Issue a credit note

1. In **Invoices**, open the row menu of the invoice and select **Credit note**. It appears only for an invoice that is open: sent, viewed, overdue or partially paid.
2. Enter the **Amount** in the invoice's currency.
3. Enter a **Reason**. It is required, and it is recorded in the ledger and the audit log.
4. Select **Issue credit**. You see "Credit note issued".

The amount cannot be more than the balance due. There is no way to undo a credit note in the console, so check the amount first. A double click issues only one.

## What changes on the invoice

- The credit shows as a **Credits applied** row in the totals, and **Amount due** goes down by the same amount. The PDF and the pay page list the same rows.
- If the credit does not cover the balance, the status becomes **Partially paid**. If it covers all of it, the status becomes **Paid**, even though no payment was made.
- The row menu's **Ledger** shows the entry with your reason.
- No email goes to the customer when you issue a credit note.

## Write off a balance

A write-off is for a balance you will not collect, such as bad debt. Select **Write off** in the row menu, give a reason, and confirm. The whole remaining balance is written off, the status becomes **Written off**, and you find the invoice under **Void & written off**. You cannot undo it from the console. It is not a refund, and it does not touch the customer's card or bank.

## Money the customer already paid

A credit note only works on an invoice with a balance. On a paid invoice it is refused, because there is nothing left to reduce. If a customer paid and you owe them money back, refund the payment from the payment's page in **Payments**. That is a separate action for owners and admins.

If a customer paid you by cash or check, select **Record payment** in the row menu instead. That is a payment, not an adjustment, and it asks for a reference such as a check number.

## Which one to use

| You want to                                 | Use                                                                                       |
| ------------------------------------------- | ----------------------------------------------------------------------------------------- |
| Lower a bill that is still unpaid           | Credit note                                                                               |
| Stop chasing a balance you will not collect | Write off                                                                                 |
| Cancel an invoice nobody has paid           | Void. See [Change, void or delete an invoice](https://support.billingmart.com/invoices/change-void-or-delete-an-invoice.md) |
| Return money already paid                   | Refund the payment                                                                        |