When do I need to use a credit note?

Scenario: Let’s say you run a small electronics store and Patricia is a customer. Now, Patricia returns a faulty gadget that she purchased from your store last week. The transaction is void, and you owe her a refund. Instead of immediately giving her cash, you decide to keep track of this debt. You create a credit note for the refunded amount and apply it to Patricia’s next purchase. This way, she need not wait for a refund, and can enhance your goodwill with your customer. Learn more about Credit Notes.