A credit note is the document which is issued by a seller to buyer, stated that the certain amount is credited to buyer’s account. A Credit note is also called credit memo note. The credit notes are issued in several situations such as; when the amount on invoice inflate, the products spoil in guaranty period, correct the rate of discount when it is not applied and when the product is returned. Mainly there are two types of credit notes the outgoing payments and incoming payments, in simple words the credit note you provide or receive. In small business both terms are used regularly.
A Credit note is not to be exchange as a typical document. The credit notes contains; date, phone number, shipping address, buyer address, invoice number, billing details, list of products and quantity of products with prices are mentioned. Credit memo is proof of goods that is purchased by the customer from the seller or retailer. In modern era people used to shopping online from the companies, they send the credit note through emails. Credit note is also used in the way that the customer does not pay full amount of an invoice. This type of credit note is effectively negative invoice.