A credit note is the legal way to undo or reduce an invoice you've already issued. You cannot delete an invoice in Vendly (or in KRA's books) — every invoice number must remain traceable. Instead, issue a credit note that references the original invoice and reduces the buyer's outstanding balance.

When to use a credit note

• The buyer returned goods.
• You over-billed (wrong quantity, wrong price, double-billing).
• You billed the wrong client.
• Goods were damaged in transit.
• Negotiated post-sale discount.

Creating a credit note

1. Sales → Credit Notes → New Credit Note.
2. Pick the original invoice from the dropdown — the line items pre-fill.
3. Adjust the quantities / amounts to reflect the actual reversal (full or partial).
4. Optionally add a reason (return / pricing error / refund / etc.).
5. Save and share with the buyer the same way you'd share an invoice.

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Open Credit Notes

Credit Notes

What happens in the books

Approving the credit note posts a journal entry that reverses (partially or fully) the original invoice's AR and Sales lines, plus the output-VAT portion. The original invoice keeps its number — its outstanding balance simply reduces by the credit-note value.

VAT effect

The credit note's output VAT REDUCES your VAT3 return for the period the credit note is issued — NOT the original invoice's period. Keep this in mind for month-end reconciliation: a credit note issued in May against an April invoice reduces your May VAT, not April.