Overview

A credit note is a legal document used to reduce the amount owed on a payable after it was issued. Entities would typically use credit notes in the following cases:

An issued payable contains a mistake (for example, wrong product or quantity).
The order needs to be changed after the payable has been issued.
The order was canceled by the entity or the customer (counterpart).

Credit notes can be used to partially reduce the payable amount as well as fully cancel a payable.

Multiple credit notes can be issued for the same payable. However, the total amount credited cannot exceed the payable amount.

Roles and permissions

To create and manage credit notes using an entity user token, this entity user must have a role with the payables permission.

If a partner-level token is used, no special permissions are needed.

Use cases

Monite API supports the following use cases for credit notes:

Reduce quantities of line items.
Example: a payable was issued for 10 laptops, but only 8 were actually delivered. A credit note can “cancel” the remaining 2 laptops that were not delivered.
Reduce the price of some or all units within a line item. (Essentially applying a discount.)
Example: A product was mistakenly billed as € 210 instead of € 200. A credit note can correct the price back to € 200.
Credit the full remaining amount of a payable. This cancels an unpaid payable, or marks a partially paid payable as paid.

Considerations and limitations

Credit notes can be created only for payables in the new, approve_in_progress, waiting_to_be_paid, and partially_paid statuses. Crediting paid payables is not supported.
Credit notes for partially paid payables can be used to reduce only the quantity of line items, but not the unit prices.
If a credit note cancels the full remaining amount of a payable:
- new and approve_in_progress payables are automatically moved to the canceled status,
- waiting_to_be_paid and partially_paid payables are automatically moved to the paid status.
Changing line item VAT rates via credit notes is not supported.
If a payable includes several line items for the same product, credit notes cannot be used to update those specific line items. However, other line items on the payable can be updated.
If a counterpart’s address or contact information was changed after a payable was issued, you can provide the updated counterpart address or contact information via a credit note. However, the updated information will only appear in the credit note; the information in the original payable is not changed.