What is a Debit Note?
A Debit Note is a document issued by your business to a customer to increase the amount they owe. It serves as a supplementary invoice for costs not covered in the original billing.
When to Use a Debit Note
- Undercharged Invoices: If a customer was accidentally billed for less than the agreed amount.
- Post-Invoice Fees: Adding shipping, handling, or administrative fees that were missed on the original invoice.
- Price Adjustments: When the price of a service increases after the initial invoice was issued, but before payment.
Impact on Balances
Issuing a debit note will:
- Increase the customer’s total outstanding balance.
- Increase your accounts receivable total.
- Increase your reported revenue for the period.
Always provide a clear explanation in the description field of a Debit Note to avoid confusion and disputes with your customers.
