If you've ever issued a refund, corrected an invoice, or canceled a charge after sending a bill, you've needed a credit memo. But what exactly is it, and how is it different from a refund or a credit invoice?
A credit memo (short for credit memorandum) is a document a seller issues to reduce the amount a buyer owes. It's not a refund — it's a correction that appears on the next statement or invoice. Think of it as a formal way to say 'we owe you' before money changes hands.
Credit Memo vs Invoice: What's the Difference?#
An invoice bills the customer for products or services delivered. A credit memo does the opposite — it reduces what the customer owes.
When Should You Issue a Credit Memo?#
Common scenarios include billing errors, product returns, service cancellations, price adjustments, and damaged goods.
Digital Credit Memos with Reinvoice#
With Reinvoice, you can create credit memos in seconds. Every credit memo is cryptographically signed with SHA-256, so you can prove it hasn't been tampered with. Customers can verify authenticity on the public verification page.