Free credit memo template
A credit memo records money you are giving back against an invoice you have already sent — materials returned, hours billed by mistake, a credit for a delay — without rewriting the invoice itself. Fill one in here and send it as a PDF or a link. Free, with no account.
What goes on a credit memo
- Your business name and contact details, and the customer’s name.
- The invoice it is against — number and job — in “Credit against”. A credit memo that does not say which invoice it reduces is just a note.
- A number of its own (this one starts at CM-101), separate from your invoices, so the credit and the bill are never confused.
- The date it was issued.
- One line per credit, with the reason: “Returned: unused cabinet pulls”, “Overbilled: 2 hrs on line 3”.
- The amounts, shown as minus figures. You type them as positive numbers; the paper does the sign.
- Tax, if the original invoice charged it on the credited lines, so it comes back too.
- The credit total, and a line making clear nothing is owed on this paper.
A worked example
The remodel was invoiced on #1043. Afterwards the customer returned a box of unused cabinet pulls, and two hours of labor turned out to have been billed twice. The pulls go back to the supplier with a restocking fee, which is passed on.
| Line | Qty | Price | Amount |
|---|---|---|---|
| Returned: unused cabinet pulls, box of 25 | 1 | $85.00 | −$85.00 |
| Overbilled: labor hours, invoice line 3 | 2 | $55.00 | −$110.00 |
| Restocking fee on returned pulls | 1 | −$15.00 | $15.00 |
| Subtotal | −$180.00 | ||
| Credit total | −$180.00 |
The restocking fee is typed with a minus price, so it takes away from the credit instead of adding to it. Tax is off because this invoice charged none on these lines; if yours did, switch tax on at the rate the invoice used and the tax is credited as well.
Credit memo or a corrected invoice?
A credit memo
Leaves the invoice exactly as it was sent and records the reduction as its own paper, with its own number and date. Both are on file, and anyone can see what was billed, what was given back, and why.
A corrected invoice
Replaces the original. That is fine for a typo caught before the customer has paid or entered it in their books; after that, two versions of the same invoice number is how bookkeeping goes wrong.
Once an invoice has gone out, most bookkeepers would rather see a credit memo than an edited invoice, because the trail stays intact. Ask yours how they want it recorded — against the invoice, as a refund, or as a credit carried to the next job.
How to send it
Send it the same way the invoice went — text, WhatsApp, email or a link the customer opens in any browser. The link shows the credit and has no Pay button, because there is nothing to pay.
When the credit has been used — taken off the balance, refunded, or carried to the next invoice — “Mark applied” in My papers records it, so the list shows which credits are still open.
What you get
A PDF you can download, print or attach, and a link the customer can open on any phone. There is no Word or Excel version — PDF only, for now. The six looks and your logo or initials work on this paper exactly as they do on an invoice; see the looks.
Questions about credit memos
What is a credit memo?
Short for credit memorandum: a paper from the seller that reduces what the customer owes on an invoice already issued — for returns, overcharges, damaged goods or a goodwill credit. It is the opposite of a bill, so its total is shown as a credit.
Does a credit memo mean I owe a refund?
Not by itself. A credit can come off the open balance of the invoice, be carried to the customer’s next job, or be paid back as a refund. Which one happens is between you and the customer; say which on the paper or in the message you send with it.
Should a credit memo include sales tax?
If the original invoice charged sales tax on the credited items, the tax usually comes back with them, at the same rate. How a returned sale is reported depends on your state, so check with your state’s revenue department or your accountant.
What is the difference between a credit memo and a debit memo?
A credit memo lowers what the customer owes; a debit memo raises it, usually to correct an undercharge. For a tradesperson, an extra charge after the fact is normally clearer as a new invoice, which is what this generator would make for it.
More on how JobPaperwork works, including what it stores and what it does not do.