What is a credit note?

In the EU, local invoicing legislation dictates that once you send an invoice to a customer, you can’t alter it. This means that businesses returning money to customers need to create a separate credit note.

A credit note is a document that details the transfer of funds from the seller back to the buyer, usually for a return or refund of purchased goods or services.

The credit note confirms that the return or refund was processed and that a part (or the entirety) of the original purchase price was returned to the customer.

In your online store, you can process a customer’s request to return an item or issue a refund for an order. In both cases, this means that a part of (or the full) original purchase price gets returned to the buyer.

A credit note is a statement detailing this transfer of funds from the store to the customer.

Its main purpose is to serve as a record of the transaction, and to confirm that the return or refund process was completed.

Credit notes also include an itemized list of goods originally purchased. If your customers are businesses, they may actually need such documents for their accounting purposes. In some countries, the local tax system requires that each addition or subtraction on their bank account needs to be backed by a document in their records.

As a general rule, a credit note should show the same information as a compliant invoice. A credit note can and should contain:

Documents like invoices and credit notes do more than just provide detailed records of a transaction; they also represent an important touchpoint with your customers.

By including all the key information and presenting it in a clear and professional manner, credit notes help you build stronger business relationships. This is because the customer can trust you that you have processed their claim correctly.

The design of your credit note should also match your invoice and other important documents. Thanks to Sufio, you should already be able to create and send beautifully designed invoices; a credit note in the same style only keeps your brand consistent.

Credit notes are an integral part of the document ecosystem provided by Sufio. Our app lets you create and send credit notes using data from refunds you record in your Shopify store.

This way, the process is fully automated and Sufio can handle the creation and sending of documents directly to customers.

There are two ways to create credit notes on Shopify and Sufio’s powerful automation supports both of them. You can choose one depending on the legal requirements of your country (or your preference).

Both approaches ensure that you and your customers have a clear view of transactions, minimizing confusion and administrative overhead.

For the original purchase transaction, your customer will receive a professionally designed invoice from Sufio.

And then, for every refund or return of an item, they will receive a corresponding credit note, ensuring clarity in their financial records. The original invoice stays unaffected and valid, along with the related credit notes.

When you create a return or refund, Sufio issues a credit note for the original order total and then creates a new invoice for the adjusted price. This happens even when you process multiple returns or refunds of one order.

This way, once everything is settled, your customer will only have one valid summary invoice, as all the previous documents are canceled out. It’s an easier method for administration because, for each order, you’re left with only one final invoice instead of several documents.

Credit notes are an excellent opportunity to create a positive impression of your brand. By paying attention to the design of your credit note, you can build a sense of trust and keep your branding consistent.

Are you looking for fully compliant credit notes for Shopify that still showcase your brand’s personality and style? Try Sufio and give your customers one more reason to remember your brand.