Start from the original invoice
Open the invoice from Sales, then Invoices, and press Credit note. A credit note is always raised from an issued invoice, which is why the Credit notes tab has no create button.
Give the reason
Pick a ready reason such as Goods returned or Cancellation of the invoice or part of it, or type your own, then press Create credit note. The reason is required and prints on the note, because ZATCA refuses a note without one.
Adjust the draft and issue it
A draft opens with all the invoice lines. To cancel the whole invoice, leave it as it is. For a partial correction, change the quantities or remove the lines that do not apply.
The Restock column starts ticked: keep it if the goods really came back, and untick it if only the price is being corrected. Then press Issue.
| Account | Debit | Credit |
|---|---|---|
| Sales revenue | 1,000.00 | |
| VAT payable | 150.00 | |
| Receivables | 1,150.00 |
An issued note cannot be edited, and the credit notes on an invoice cannot add up to more than the invoice. If you see that message, check the earlier notes on the same invoice.
Check the effect
The note takes a number and shows the reason (1). It is applied to the invoice automatically, so the balance falls, and it is listed in the Credit notes card on the invoice page. If the invoice was fully paid, the amount stays as a credit for the customer and shows on their statement. Once your business is connected to ZATCA, the note goes there just as the invoice does.
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