Canceling Invoices: When Credit Note, When Cancellation Invoice?

A typo in the amount, the wrong address, or the customer returned a product: Mistakes in invoicing happen. But beware: Simply deleting or "overwriting" the file is strictly prohibited according to GoBD.

To correct an invoice legally, there are two ways: The cancellation invoice and the credit note. In this guide, we clarify which document you need when.

Quick Overview: What Is What?

1. The Cancellation Invoice (Invoice Cancellation)

Formerly often simply called "credit note," today the correct term is cancellation invoice or invoice correction.

When to Use?

When an invoice has already been sent to the customer, but is completely wrong (wrong recipient, wrong date, completely wrong amount).

How Does It Work?

The cancellation invoice must show a negative amount (e.g., -€100) and must refer to the original invoice number.

The Result: The original invoice and the cancellation offset each other to zero in accounting. Then you create a new, correct invoice.

2. The Commercial Credit Note

In practice, we mostly use the word "credit note" when we give money back to the customer after the invoice was actually correct.

When to Use?

• For goods return (return)
• For retrospective discount
• For goodwill payment

Important: Here too there must be a reference to the original invoice.

3. Caution Confusion Risk: The Tax Credit Note

Here it gets tricky. In tax law, there is also the "credit note as invoice."

Example: An affiliate partner or a commission recipient doesn't write an invoice to you, but you (as the client) create the statement for them. In this case, the document is a credit note that is legally evaluated as an invoice.

Why You May Never Simply "Delete" an Invoice

The tax office requires the immutability of documents (GoBD). Once an invoice number has been assigned, it must remain in the system. If you delete a file, a gap is created in your number sequence - this triggers alarm bells at every tax audit.

The Correct Workflow:

1. Leave original invoice in system - do not delete!
2. Create cancellation invoice with negative sum
3. New invoice with new number (or reference to cancellation)

The Workflow in Comparison

How Clever Invoice Helps

Manual creation of cancellation documents is error-prone. Are the input tax amounts correctly offset? Is the reference to the old number correct?

With Clever Invoice you do this with two clicks:

1. Select the incorrect invoice
2. Click "Cancel"
3. The system automatically creates a GoBD-compliant correction document with all mandatory information and negative signs

Conclusion: Precise Terms Save Trouble

Use the term "cancellation invoice" when you correct an error, and "credit note" when you refund money. This way your tax advisor immediately knows what to do.

Have you just created a wrong invoice in the system? Cancel it legally now with Clever Invoice - fast, simple, and tax office compliant. Try it free now.