A credit note records money you owe back against an invoice - because an order changed, something was cancelled, or you chose to give credit. The value can be refunded, or held as customer credit and applied to another invoice later. This article covers where credit notes come from, what's on them, and how customer credit works.
When credit notes are created
Cademy issues a credit note automatically whenever a paid or issued invoice is corrected downwards. The reason is always recorded, and you'll see these on the Credit Notes tab: Participant removed, Course removed, Price reduced, Order cancelled, Goodwill, External refund, Manual adjustment, and Overpayment.
Every credit note is emailed to the customer automatically with a PDF, stating the amount credited and exactly what happened to the money.
Reading a credit note
Open any credit note (from the Credit Notes tab, an invoice, or an order) to see:
Which invoice it corrects, with a link to it and to the order.
The reason and any note - for example the name of the removed participant.
Its lines and totals: Total Credited, how much has been Refunded, how much is Applied to Invoices, and the Remaining Refundable amount.
Refunds against this credit note - every refund is funded by a credit note, so the money trail is always visible here.
Its Xero credit note number, when synced.
Actions on the panel: Download PDF, Resend (sends the credit-note email again), Refund… (when there's refundable value left), and Apply to Invoice… (when the customer has an open invoice the credit can settle).
Adding a credit note manually
To reduce what a customer owes on an invoice - a price match, a goodwill discount after issue - open the invoice's More menu on the order and choose Add Credit Note. You enter the amount (up to the balance due) and a reason, which appears on the credit note - so write it for the customer, for example "Price match - early-bird rate honoured".
The credit reduces the balance due - no money moves, and the credit note is emailed with its PDF.
Customer credit: holding value on account
When a cancellation or order change leaves paid money that isn't refunded, you can hold it as credit instead. The value stays on the credit note as remaining credit, belonging to the billed person or organisation.
You can see who holds credit in three places:
On any of their orders - a banner shows "{name} holds {amount} of account credit", listing the credit notes funding it.
On their contact or organisation page - a Credit: line, expandable to the underlying credit notes.
On the Credit Notes tab - the Has Remaining Credit filter shows every credit note still holding value.
Applying credit to an invoice
From the credit banner choose Apply to an Invoice… (or use Apply Credit in a payable invoice's More menu). Pick the invoice and confirm the amounts - credit is drawn from the customer's credit notes oldest first, and can't exceed the invoice's balance due. Credit settles the balance like a payment, but no money moves - the value comes off the credit notes.
Applied credit appears on the invoice as its own row: "Credit applied from {credit note}". Applying credit only works between invoices in the same currency.
Removing applied credit
Made a mistake, or the customer wants the credit kept for something else? Open the applied-credit row's ⋯ menu and choose Remove Credit…. The dialog spells out the consequence before you confirm: the amount returns to the credit note's remaining credit, and the invoice's balance increases back to the resulting amount. Nothing is deleted - the history stays visible on the credit note.
Refunding held credit
If the customer would rather have the money back, open the credit note and choose Refund…. The refund dialog works like any other refund: it shows where the money can go (automatic for Stripe and PayPal payments, recorded manually for others) and records everything against this credit note. When an invoice with credit is refunded, the refund draws on the held credit first.