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Credit & debit notes

This guide shows you how to issue credit notes and debit notes — the documents that adjust an already-issued invoice or bill (a return, a price correction, a shortfall) while keeping your GST records correct.

What this is

You can't simply edit a posted invoice to fix an amount — that would break your audit trail and your GST filing. Instead you issue a note that adjusts it:

Note Use it when Effect
Sales Credit Note A customer returns goods or you reduce what they owe Reduces the customer's receivable & your output GST
Sales Debit Note You need to charge a customer more after the invoice Increases the receivable & output GST
Purchase Credit Note You return goods to a vendor / they reduce your bill Reduces the payable & your input GST
Purchase Debit Note A vendor charges you more after the bill Increases the payable & input GST

All four work the same way; the sales side is shown below.

Before you begin

  • Role required: Admin or Accountant.
  • Prerequisites: The original posted invoice (or bill) you're adjusting. You can link to it, which pulls in the customer and lines automatically.

Issue a sales credit note

Go to Sales → Sales Credit Notes → Create. Then:

  1. Link to original invoice (optional but recommended) — search the invoice number; selecting it fills the customer and amounts for you.
  2. The Credit Note Number is auto-assigned (e.g. CRN-0002).
  3. Pick the Reason — Sales Return, Price Reduction, Deficiency in Service, Correction of Invoice, or Others. (The reason is reported in GSTR-1.)
  4. Adjust the line items to only what's being credited — e.g. the one chair the customer returned, not the whole invoice. TrackBooks recomputes the tax.

Creating a sales credit note linked to the original invoice

Click Save & Post to finalise it (or Save as Draft to finish later). Posting creates the reversing journal — reducing the customer's receivable and your output GST by the credited amount.

Purchase-side notes

Purchase credit and debit notes live under Purchases → Purchase Credit Notes / Purchase Debit Notes and work identically, except they adjust a vendor bill and your input GST instead of output GST.

How notes flow into GST returns

  • Sales credit/debit notes to registered customers appear in GSTR-1's CDNR section; to unregistered customers, in CDNUR.
  • Purchase-side notes adjust the ITC you report.

This is why the Reason and the link to the original invoice matter — they carry through to your filing.

Tips & common issues

Credit only what changed

A credit note doesn't have to mirror the whole invoice. Trim the line items to exactly what's being returned or reduced, and TrackBooks recalculates the tax on just that.

Notes adjust — they don't delete

Issuing a credit note is the correct way to walk back part of a sale. Don't try to void the original invoice for a partial return; void is for cancelling an invoice entirely.