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Credit Notes & Refunds

Issue refunds and credit notes to customers for billing adjustments

Difficulty:Intermediate

What this is

Credit notes let you issue refunds or credits to customers for billing errors, returned services, or goodwill gestures. They create a paper trail while reversing invoice charges.

Who this is for

  • Owners & Admins: Issue refunds for customer satisfaction
  • Billing Staff: Correct billing errors
  • Not for Technicians: No access to financial records

When you use this

  • Billing Error: Overcharged customer
  • Service Issue: Work not completed as promised
  • Warranty Claim: Covering repair under warranty
  • Returned Materials: Customer returned unused parts
  • Goodwill Gesture: Customer satisfaction/retention

How it works

Quick Actions

Full Refund:

  • Refund entire invoice amount
  • Original invoice marked "Refunded"
  • Customer receives full payment back

Partial Refund:

  • Refund specific line items or amount
  • Original invoice marked "Partially Refunded"
  • Remaining balance still owed (if any)

Credit on Account:

  • Don't refund to payment method
  • Apply credit to future invoices
  • Customer keeps credit balance

Step-by-Step Process

See the complete guide: Issue Refund

Quick Summary:

  1. Navigate to invoice
  2. Click "Issue Refund" button
  3. Choose refund amount and reason
  4. Select: Refund to payment method OR Credit on account
  5. Customer receives email notification
  6. Credit note generated automatically

Credit Note Format

Example Credit Note:

CREDIT NOTE
CN-2026-0042

Reference Invoice: INV-2026-0234
Date: February 14, 2026

Customer: Johnson HVAC
Service: AC Repair Refund

Original Charge:  $450.00
Refund Amount:   -$450.00
───────────────────────────
Net Change:      -$450.00

Reason: Billing error - duplicate charge
Refunded to: Visa ending 4242

Impact on Invoice

Before Refund:

  • Status: PAID
  • Amount: $450.00
  • Balance: $0.00

After Full Refund:

  • Status: REFUNDED
  • Amount: $450.00
  • Refunded: -$450.00
  • Net Revenue: $0.00

After Partial Refund ($150):

  • Status: PARTIALLY REFUNDED
  • Amount: $450.00
  • Refunded: -$150.00
  • Net Revenue: $300.00

Important rules

  • Only for paid invoices - Can't refund unpaid invoices (void them instead)
  • Audit trail required - Must provide reason for refund
  • Can't delete credit notes - Permanent record for accounting
  • Multiple refunds allowed - Can issue multiple partial refunds
  • Processing time - Stripe refunds take 5-10 business days

Common mistakes

Mistake 1: Trying to refund unpaid invoice

  • What happens: "Can only refund paid invoices" error
  • Fix: If invoice not paid yet, void it instead of refunding

Mistake 2: Refunding without reason

  • What happens: Incomplete audit trail
  • Fix: Always document reason (billing error, service issue, etc.)

Mistake 3: Partial refund confusion

  • What happens: Customer still owes money but thinks invoice is settled
  • Fix: Clear communication - explain remaining balance

Refund Methods

1. Refund to Payment Method

Best for: Billing errors, service issues

How it works:

  • Money returned to original payment method
  • Credit card: 5-10 business days
  • Bank transfer: 3-5 business days
  • Customer receives refund confirmation email

Example:

✅ $450.00 refunded to Visa ****4242
Customer will see "CREWDEX REFUND" on statement
Expected arrival: February 19-24, 2026

2. Credit on Account

Best for: Goodwill, future service discount

How it works:

  • No money transferred
  • Credit applied to customer's account
  • Automatically deducted from next invoice

Example:

✅ $150.00 credit added to account
Current credit balance: $150.00
Will be applied to next invoice

Financial Impact

Revenue Recognition

Full Refund:

  • Original invoice: +$450.00 revenue
  • Credit note: -$450.00 revenue
  • Net revenue: $0.00

Partial Refund:

  • Original invoice: +$450.00 revenue
  • Credit note: -$150.00 revenue
  • Net revenue: $300.00

Reporting

Credit notes appear in:

  • Revenue reports - Deducted from gross revenue
  • Customer statements - Shows credit applied
  • Tax reports - Reduces taxable income
  • Audit trail - Complete refund history

Need more help? Contact [email protected]

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