Free Bookkeeper Credit Note Template
Issue credit notes for bookkeeping service refunds, retainer adjustments, and billing corrections. Free PDF, no signup.
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When does a bookkeeper issue a credit note?
A bookkeeper issues a credit note when a billed service is reduced or refunded, such as a part-used monthly retainer or a smaller year-end scope. The note references the original invoice, describes what changed, and lowers the amount owed so the client's ledger matches the work actually carried out.
Typical line items
- Original invoice number and date
- Monthly retainer partial refund, two of four weeks unused
- Year-end accounts scope reduction credit
- Reason for the adjustment
- Credited amount
- Balance now due
- Tax adjusted accordingly
How the work is charged
Work the credit from the retainer or fee on the original invoice, prorating it for the portion not used. A scope reduction is credited at the value of the tasks removed rather than a round figure.
Payment terms and deposits
Offset the credit against the next monthly invoice or refund it to the original payment method, quoting the original invoice number. Show the adjusted balance so the client can reconcile cleanly.
Tax and compliance
If the original invoice included sales tax or VAT, the credit note generally reverses that tax in proportion to the fee credited. Confirm the rules that apply where you operate.
Frequently asked questions
A client cancelled their bookkeeping retainer without notice mid-month. Do I refund the unused portion?
This depends on your service agreement. If your terms require notice before cancellation, you may be entitled to keep the full month. If your contract is silent on notice periods or you choose to refund pro-rata, issue a credit note for the unused days. Either way, make sure your agreement is clear for future clients.
I discovered I overbilled a client over three consecutive months due to an incorrect rate. Do I issue three credit notes?
You can issue a single credit note covering all three months if it clearly references each invoice and shows the amount per month. Alternatively, issue one per invoice. A single summary credit note is often cleaner and easier for the client to reconcile. Reference all original invoice numbers in the credit note.
Should a bookkeeping credit note include VAT if the original invoices were VAT-exempt?
No. Mirror the tax treatment of the original invoice. If the original services were invoiced without VAT because you are below the registration threshold or because bookkeeping is exempt in your jurisdiction, the credit note should also show no VAT. Adding VAT to the credit note when it was not on the original invoice creates an incorrect tax entry.
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Read the complete credit note guide to see when to issue one and how it adjusts an invoice already sent.
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