Credit Notes: Apply Credits and Adjustments to Student Accounts

A credit note is a formal document that reduces a student's outstanding balance. You use credit notes when a student is owed a reduction — for example, a fee waiver approved by management, a correction to an overcharge, or an agreed discount that was missed at invoicing time. Unlike a refund, a credit note offsets charges directly on the student's account rather than returning money; it is the right tool when no cash disbursement is involved.

Credit notes vs. refunds

Choosing the right tool avoids accounting errors and keeps the ledger clean.

Use a Credit Note when…

• A fee is being waived or reduced (no cash returned)
• An invoice was overcharged and needs an in-account correction
• A student's balance should be offset without issuing a payment
• The adjustment requires a formal approval trail

Use a Refund when…

• A student paid and is entitled to cash back
• You need to return money to the student's bank account or original payment method
• The credit arises from a cancelled or over-allocated payment

Credit note lifecycle

A credit note moves through a defined set of statuses before it affects a student's balance. Each transition requires an explicit action and is recorded in the ledger.

Draft → Submitted → Approved → Issued → Processed                 ↘ Rejected              ↘ Void                 ↙ (back to Draft)

Status descriptions

Creating and issuing a credit note

1. Create the credit note — Navigate to Billing → Credit Notes and select New Credit Note. Choose the student, the invoice you want to credit against, and enter the amount, currency, and reason. The credit note is created in draft status, and you can edit the amount and reason at this stage.

2. Submit for approval — When the credit note details are correct, select Submit for Approval. This transitions the status to submitted and notifies the designated approver.

   Note: You cannot edit a submitted credit note. If you need to make changes after submission, ask an approver to reject it — this returns it to draft status so you can correct the details and resubmit.

3. Approver reviews and decides — An authorised finance manager opens the credit note and selects Approve or Reject. A rejected credit note returns to draft status with a reason, allowing you to correct and resubmit.

4. Issue the credit note — Once approved, select Issue to make the credit note active on the student's account. Issuing generates a ledger entry reflecting the reduction in the student's balance, and the status moves to issued.

5. Apply the credit note to an invoice — Open the issued credit note and select Apply to Invoice. Choose the invoice line items you want to offset and the amount to apply to each. When fully applied, the credit note status transitions to processed and the invoice item's outstanding balance is reduced accordingly.

Note: Approval is required before a credit note can be issued. You cannot skip the approval step — the Issue action is only available on approved credit notes. This ensures all balance reductions have a documented authorisation trail.

Voiding a credit note

If a credit note was created in error or is no longer needed, void it before it reaches issued status by selecting Void from the credit note's action menu.

Warning: You can only void a credit note that has not yet been issued. Once a credit note is issued or processed, it has affected the ledger and cannot be voided. To reverse an issued credit note, contact your system administrator — a correcting ledger entry will need to be made through the appropriate adjustment process.

Viewing credit notes

Open Billing → Credit Notes to see all credit notes for your institution. Filter by student, status, date range, or invoice. Each credit note record includes the student, linked invoice, amount, reason, current status, and the full approval history.