Have you made a mistake on an invoice but already sent the invoice to your customer? Or have you agreed with your customer to charge less? No problem. In this article, we explain how you can process this in Gekko.
Easily create an invoice in Gekko, online or via the mobile Gekko invoicing app.
What is a credit invoice?
A credit invoice is essentially a regular invoice on which the amount you want to correct is stated.
Suppose: you sent an invoice for €1,000 (excl. VAT). But you should have actually charged only €600.
You create a credit invoice for €400. Your customer eventually receives two invoices: the (incorrect) invoice for €1,000 and a credit invoice for €-400. Together, this makes up the correct amount of €600.
Keep the incorrect invoice in your administration
First of all, it is important to remember what not to do: never delete the incorrect invoice from your administration once the invoice has been sent. You can leave the invoice and create a new credit invoice for the amount that was overcharged.
Creating a credit invoice (website)
- Go to your invoice overview
- Click on the three dots behind the original (incorrect) invoice
- Choose the option 'Credit Invoice' (image A)
- Enter all the necessary details
- Make sure to enter the correct amount (a negative number). Gekko automatically enters the amount of the original invoice
- Save the invoice and send it to your customer
Image A. Select 'Credit Invoice'
Image B. Create a credit invoice
Creating a credit invoice (mobile)
- Open the Gekko invoicing app on your mobile device
- Open the invoice for which you want to create a credit invoice
- When viewing your invoice, tap on the three dots in the upper right corner for options
- Tap on 'Credit Invoice'
- Edit the credit invoice and tap on the green button at the bottom right to save (and send) your invoice.
Often, no payment is made with a credit invoice. If the customer hasn't paid the original invoice, they don't need to receive the credit amount back. However, you still need to add a payment by either sending the invoice as "paid" or adding a payment later. Otherwise, your invoice will eventually be marked as "late".
You also need to add a payment to the original invoice even if it hasn't been paid by the customer. The reason is that you have theoretically made two transactions (after all, you have sent two invoices) and this ensures that the total of the payments matches the total amount exchanged.
To make this extra clear, you can add something like "fictitious correction amount for credit invoice" to the description of a payment.
What else to consider?
You can include a credit invoice in your regular invoice numbering or start a separate series with only credit invoices. Both options are possible, as long as you are consistent. When you send a credit invoice, don't forget to mention the invoice number of the old incorrect invoice in your accompanying message. This is not necessary, but including an invoice number makes it clear for your customer.
The balance sheet and profit and loss statement are snapshots of your administration, and this can sometimes be confusing, especially with credit invoices. A credit invoice can affect your profit and loss statement. Suppose you sent an invoice in December and received payment for it, but there was a mistake in your invoice. In January, you then send a credit invoice, but what does this mean for your administration?
The total revenue will have increased in the previous year but will contain a negative amount in the following year, the same goes for the profit. But because the net equity remains €0, a negative amount will have been withdrawn for the previous year, and a positive amount will have been deposited in the following year.
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