Issue a credit note when a customer returns goods, when you agree to reduce the price on a raised invoice due to quality issues or a negotiated discount, when an invoice was raised for the wrong amount, or when a service was not delivered as promised. The credit note offsets the original invoice, reducing both Accounts Receivable and the income account (or the applicable GST liability if the original included GST).
Go to Sales, then Credit Notes, and click New Credit Note. Select the customer and the original invoice. Zoho Books pre-fills the line items and amounts from the invoice. Edit the quantities or amounts to reflect what is being credited, select the correct GST rate (which should match the original invoice), and save. Zoho Books numbers the credit note sequentially and links it to the original invoice.
For GST-registered businesses, credit notes reduce your GSTR-1 reported output tax. Zoho Books automatically adjusts the GST figures in the relevant GSTR-1 sections when you raise a credit note. The GST rules prescribe that a credit note related to a financial year’s invoice must be raised before the 30th of November following that financial year, or before filing the annual return, whichever is earlier. Zoho Books does not enforce this deadline automatically, so monitor credit note dates carefully.
A credit note in Zoho Books is a document that reduces the amount a customer owes you, issued when goods are returned, a price adjustment is made, or an invoice was raised in error. It reduces Accounts Receivable and output tax liability.
Open the credit note and click Apply to Invoice. Select the invoice to be credited. Zoho Books reduces the outstanding balance on that invoice. Remaining credit can be applied to future invoices or refunded.
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