Supplier Credit Notes — Issue a Clean Adjustment in 30 Seconds

How to write a supplier credit note

Looking for the full tool? Start at the AI credit note generator for any kind of credit note. This page is built for suppliers and vendors who need to credit a buyer against a specific invoice — for returned goods, overcharges, damaged or short-shipped stock, or an agreed rebate.

A supplier credit note is a formal correction to money you've already billed. Because it changes a buyer's payable balance and your tax position, it has to be unambiguous and traceable back to the original sale. Issue one promptly when something on an invoice was wrong or goods came back — leaving an overcharge uncredited damages the trading relationship and your reconciliation.

What every supplier credit note needs

• A unique credit note number — kept in its own sequence, separate from invoices, for clean audit and bookkeeping.
• A reference to the original invoice — the invoice number and date so the buyer's accounts payable team can match and offset it.
• Itemized credit lines — only the goods or charges being credited, each with quantity, unit price, and line total.
• The tax adjustment — VAT or sales tax reversed on the credited net, recalculated automatically.
• How the credit applies — a refund, an account credit, or an offset against the buyer's next order.
• Your supplier and tax registration details so the document stands up for both parties' records.

Common supplier credit note mistakes

The biggest one is crediting a gross figure without reversing the tax separately — the credit note then won't net off correctly against the original taxable supply. The second is omitting the original invoice reference, which leaves the buyer unable to match it and your aged-debtors report out of step. Always credit only what's genuinely owed back, line by line, rather than rounding to a lump sum.

If you're crediting a customer return rather than a wholesale supply, the sales return credit note page is shaped for that. For tax-specific formatting, see the VAT credit note. Whichever you need, describe the adjustment and download a print-ready PDF in about 30 seconds.