> ## Documentation Index
> Fetch the complete documentation index at: https://alguna.com/docs/llms.txt
> Use this file to discover all available pages before exploring further.
# Credit Notes
> Issue credit notes to adjust invoices
# Credit Notes
Credit notes reduce or cancel the amount a customer owes. Use credit notes for refunds, billing corrections, or service credits without voiding the original invoice.
***
## When to Use Credit Notes
| Scenario | When to Use |
| -------------------- | ------------------------------------- |
| **Billing error** | Customer was overcharged |
| **Service issue** | Compensation for downtime or problems |
| **Partial refund** | Customer canceled part of their order |
| **Full refund** | Customer canceled entirely |
| **Price adjustment** | Retroactive discount applied |
***
## Creating a Credit Note
1. Navigate to **Invoices** and select the invoice
2. Click **...** menu → **Create Credit Note**
3. Choose credit type:
* **Full credit** - Credit entire invoice amount
* **Partial credit** - Specify a custom amount
4. Add a reason (required for audit trail)
5. Click **Create**
The credit note is created in **Draft** status for review.
***
## Credit Note Statuses
| Status | Description |
| ----------- | ------------------------------------------ |
| **Draft** | Created but not finalized - can still edit |
| **Issued** | Finalized and sent to customer |
| **Applied** | Applied to customer's credit balance |
| **Voided** | Canceled before processing |
***
## Issuing a Credit Note
Once reviewed, issue the credit note:
1. Open the credit note
2. Click **Issue**
3. Choose whether to send email notification
4. Click **Confirm**
Issued credit notes cannot be voided. Review carefully before issuing.
***
## Applying Credits
After issuing, you can apply the credit to the customer's balance:
1. Open the issued credit note
2. Click **Apply to Balance**
3. Confirm
The credit amount becomes available to offset future invoices.
***
## Viewing Credit Notes
### For a Specific Invoice
1. Navigate to **Invoices** → select invoice
2. View **Credit Notes** section
### All Credit Notes
1. Navigate to **Invoices** → **Credit Notes** tab
2. Filter by status, date, or customer
***
## Best Practices
Always include clear reasons for audit trails.
Use draft status to review before finalizing.
***
## API Reference
For programmatic credit note management, see the [Credit Notes API](/api-reference/credit-notes/create).
***
## Next Steps
Learn about refund processing.
Return to invoicing overview.