Partial credit note example and remaining balance

A partial credit note reduces only the agreed portion of an invoice. Keep the original total, payments and credit separate so the remaining balance can be checked without rewriting the original sale.

By My Inventory Items · Practical document guide

Start with the original invoice

Record the invoice total and all payments already allocated. Identify only the lines or amount being adjusted. If you agree a percentage reduction, state whether it applies before or after tax and calculate consistently.

Calculate the remaining amount

For an open invoice with no refund or other adjustments, remaining amount = invoice total − payments − applied credit notes. A negative result indicates a customer credit requiring allocation or refund; it is not another amount to collect.

Reconcile refunds and future allocations

When the customer has a credit balance, document its agreed treatment. Track each use of the credit against its note number. Refunding a credit and applying it to another invoice are separate settlement actions that must not duplicate the amount.

Worked example

An invoice of £1,200 has £400 already paid. A £240 total credit reduces the remaining amount to £560: £1,200 − £400 − £240 = £560. The payment remains £400; the credit is not another cash receipt.

Illustrative arithmetic, not a customer case study.

Frequently asked questions

Can a credit be larger than the unpaid balance?

Yes, for example when the customer has already paid. The excess creates a customer credit to settle by an agreed refund or future allocation; verify that the credit itself matches the adjustment.

Official sources and scope

The previews use UK-style GBP and VAT details. The UK guide draws on HMRC guidance; other guides explain document workflows and illustrative arithmetic. Source links checked on 17 October 2026.

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Give every adjustment a clear record.

Enter your own details in the free credit note generator. It offers GST fields and browser print or PDF output in its own layout. Review the tax fields for your transaction.

Create a credit note

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