How to write a debit note invoice.
Learn how to make adjustments to already-sent invoices with a debit note.
Wondering how to write a debit note invoice adjustment but not sure where to begin? Errors and changes happen. If you have already sent an invoice to a customer only to realize you undercharged them, what can you do? You can’t send another invoice, which might interfere with the customer’s accounting processes and create a confusing situation — especially if the invoice has already been paid. Instead, send a debit note to adjust the total due.
What is a debit note invoice?
A debit note is an extension of an invoice. Think of it like a “P.S.” that’s sent after the fact. The old invoice is still valid, so it won’t mess up your or your customer’s books, but the debit note corrects any errors. Debit notes increase the total cost of an invoice, while credit notes decrease it.
What is a debit note vs. an invoice?
A debit note and an invoice serve different purposes in business transactions. An invoice is like a payment request, sent from a seller to a buyer, laying out the details of products or services provided and the total amount due. On the other hand, a debit note is used to let the buyer know they owe more money than initially thought due to overcharges, extra fees, or corrections made to a previous invoice. In a nutshell, invoices kickstart a sale and ask for payment, while debit notes sort out or fix the terms of a previous deal, ensuring accurate financial records.
What to include in a debit note invoice adjustment.
How you write a debit note is very similar to writing an invoice. They contain much of the same information, with the main difference being that the debit note needs an additional reference to link it to the original invoice.
Be sure to include the following information in your debit note:
- Customer name, address, and contact information
- Your company information
- Item descriptions, quantities, and prices
- Debit note number
- Original invoice reference number
- Total amount due (not counting original invoice)
- Other terms and conditions
How to write a debit note invoice adjustment.
A properly formatted debit note offers clarity and professionalism in your financial transactions. Here are the key steps to create one:
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Use a template or software. Choose a debit note template or accounting software for a structured format.
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Include key information. Add your company and customer details along with the reason for the adjustment.
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Specify the adjustment amount. Make sure that you clearly state the revised amount.
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Reference the original invoice. Include the original invoice details for context.
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Date the debit note. Make sure that the adjustment date is mentioned clearly.
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Obtain signatures (if needed). Include the sender and recipient signatures if required.
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Securely deliver and keep a copy. Email or send the debit note securely and retain a copy for your records.
Difference between debit note vs. credit note.
Understanding the difference between a debit note versus a credit note is crucial when learning how to adjust invoices and track payment changes effectively.
Debit notes serve as a means for sellers to communicate an upward adjustment in the buyer’s outstanding balance. They are typically issued when there are instances of overcharges, additional charges, or the necessity to rectify errors in a prior invoice. Debit notes are legally binding documents, essential for helping to ensure financial accuracy, and are particularly useful in scenarios involving late payment penalties or addressing billing discrepancies.
Meanwhile, credit notes are formal documents used by sellers to reduce the buyer’s financial liability. They are often employed in response to events such as product returns, refunds, discounts, or other deductions. Credit notes play a critical role in lowering the outstanding balance owed by the buyer and are a valuable tool for managing accounts and resolving matters like returned goods or billing disputes. Debit notes and credit notes serve opposing functions — the former increases liabilities while the latter decreases them.
Simplify debit note signatures with Adobe Acrobat.
Some companies require a signature on debit notes. If you or your clients need to sign debit notes or invoices, simplify the process using e-signature software like Adobe Acrobat. That way, you can streamline the approval process without involving printers, scanners, or fax machines.
Discover more about how you can simplify invoice processing with Acrobat. You can also make secure e-signatures, send documents for signature, and much more.
