Credit note
In accounting, credit note means a reduction of what a customer owes.
- Layer
- Lexicon
- Defined in
- Lexicon
- Components
- 1
Authority
This definition follows ASC 606-10-32 — variable consideration.
Every citation in this system, with the text we read and the date we checked it, is in US GAAP and where these rules come from.
Credit note, in use
Quoted from the document that use the word — what it does to an interface, in the spec's own sentence.
A credit note says the customer doesn't owe it; a write-off says they owe it and won't pay.
For founders
The same idea written for a founder: what it costs a startup that ignores it, and what to do in a real month.
- What to put on an invoice: a field-by-field guideThe fields a B2B invoice needs to get paid on time: legal names, a numbering sequence, dates, terms, tax lines, PO and remit-to, and how to fix one.
- Bad debt and write-offs: allowance vs direct methodHow to book a customer who won’t pay: the GAAP allowance under ASC 326, the direct write-off the IRS requires, and what to do if the money comes back.
- AR aging and collections: a practical guide for startupsHow to read an AR aging, work out DSO, run a dunning cadence, record a promise to pay, escalate a late account and clear unapplied cash.
What it is not called
Each of these is a real word for a different thing. Using it here is what makes a product read as though it was built by someone who has not done the work.
- refund
- credit memo (pick one — we use credit note)
Components that render this
The concept is not documentation-only. These are the components that name it in their specification, grouped and stated exactly as the catalog states them.
Components that render the terms it depends on
Little in the catalog names this concept outright, but its definition is built out of others that are named. These render credit.
Terms this one depends on
Also in Receivables
Work with this concept
The calculators that compute it and the ledger payloads that carry it. A definition is where a reader starts; these are where they go next.
- Credit notes and refundsWhat object reduces an invoice, and what returns the cash?API
- Journal entry for a customer refundTo refund a customer for an invoice already paid, issue a credit note — debit Sales returns and allowances, credit Accounts receivable — then pay the refund: debit Accounts receivable, credit Cash.Entry
Defined in Lexicon. This page is generated from that document, so the two cannot disagree.