Credit Notes Explained
A credit note (German: Stornorechnung) is a document that formally reverses a previously issued invoice. This page explains what credit notes are, how they differ from similar document types, the legal requirements behind them, and how docs101 implements them in a ZUGFeRD-compliant way.
What Is a Credit Note?
A credit note cancels an existing, finalized invoice in its entirety. It creates a new document with the same line items but negative amounts, effectively reversing the financial impact of the original invoice. The original invoice remains in the system with a Canceled status — it is never deleted.
When do you need a credit note?
- An invoice was sent to the wrong customer
- The invoiced amounts, VAT rates, or positions were incorrect
- The underlying transaction was canceled after the invoice was finalized
- A duplicate invoice was issued by mistake
Credit notes are only required for finalized invoices (status Open, Sent, or Paid). Draft invoices can be canceled directly without a credit note because they have not yet been assigned a legally binding invoice number.
Distinguishing Similar Terms
Three document types are frequently confused in invoicing. They serve different purposes and have different legal implications:
| Credit Note (Stornorechnung) | Corrective Invoice (Rechnungskorrektur) | Self-billed Credit Note (Gutschrift) | |
|---|---|---|---|
| Purpose | Fully reverses an existing invoice | Corrects specific errors in an existing invoice | Buyer issues an invoice on behalf of the seller |
| Initiated by | Seller | Seller | Buyer |
| Amounts | All positions negated (negative total) | Only corrected positions listed | Positive amounts (represents payment to seller) |
| Reference | Must reference the original invoice number | Must reference the original invoice number | References the purchase order or contract |
| Common use case | Wrong customer, canceled transaction | Minor error in unit price or quantity | Commission settlements, consignment |
| docs101 support | Yes (full cancellation) | Not yet supported | Not applicable |
In everyday German, "Gutschrift" is often used colloquially to mean a credit note or refund. In tax law, however, a Gutschrift (§ 14 Abs. 2 Satz 2 UStG) specifically refers to a self-billed invoice where the buyer creates the document. Using the correct terminology avoids confusion with your accountant and tax authority.
Unpaid vs. Paid Invoices: Offset or Refund
What happens after a cancellation depends on whether the customer already paid the original invoice.
| Cancel an unpaid invoice | Cancel a paid invoice | |
|---|---|---|
| Original invoice | Canceled | Canceled, payment date is kept |
| Credit note | Draft, Open, Sent. Complete after that. | Draft, Open, Sent, Refunded |
| Money | Nothing is paid. The credit note offsets the open invoice. | You pay the amount back to the customer |
| What you do in docs101 | Nothing further | Click Mark as refunded and enter date, payment method, and reference |
| Customer email | Not applicable | Optional refund confirmation |
| Dashboard and KPIs | Original and credit note contribute nothing | The same, plus a pending refunds notice until the refund is recorded |
In the paid case, docs101 does not send the money. The status Refunded documents that you paid it back. For the steps, see Cancel an Invoice & Credit Notes.
Legal Basis
Mandatory Invoice Fields (§ 14 UStG)
Credit notes are invoices in the legal sense. All mandatory fields required by § 14 Abs. 4 UStG for regular invoices also apply to credit notes:
- Seller and buyer name and address
- Tax identification number or VAT ID
- Invoice date and credit note number
- Description of goods or services
- Net amount, VAT rate, and VAT amount
- Reference to the original invoice number — this is an additional requirement specific to credit notes
Archiving and Numbering (GoBD)
Under the GoBD (Grundsätze zur ordnungsmäßigen Führung und Aufbewahrung von Büchern, Aufzeichnungen und Unterlagen in elektronischer Form), credit notes are subject to the same archiving requirements as invoices:
- Credit notes must be stored for 10 years
- The number sequence must be gap-free and traceable
- Both the original invoice and the credit note must be retained
German tax law (GoBD) permits both a shared number sequence for invoices and credit notes, and separate sequences. docs101 uses a separate number sequence for credit notes to provide clear visual distinction between invoices and cancellations. The default prefix is SR (for Stornorechnung).
How docs101 Implements Credit Notes
docs101 implements credit notes as a full cancellation — every position from the original invoice is reversed 1:1.
Key implementation details:
- Separate number sequence — Credit notes have their own configurable numbering with prefix, padding, suffix, and reset frequency. See Numbering for configuration.
- Full cancellation — All line items from the original invoice are copied with negated amounts. No partial cancellations.
- Negative amounts in PDF — The credit note PDF displays negative unit prices, negative line totals, and a negative invoice total.
- Positive amounts in ZUGFeRD XML — Per the EN 16931 convention, amounts in the structured XML data are expressed as positive values. The document type code (381) signals that these amounts represent a credit, not a charge.
- Bidirectional linking — The original invoice links to its credit note, and the credit note references the original invoice number. Both links are visible in the invoice detail view.
- Refunds are documented on the credit note — If the original invoice was paid, you record the refund on the credit note with Mark as refunded. The credit note then has the status Refunded. Refunds are always full refunds.
- KPIs net out original and credit note — The dashboard leaves out both the canceled original invoice and its credit note, so neither adds to open or paid amounts and no figure turns negative. Customer account statements and the OSS threshold calculation include both and let the credit note offset the original. See Account Statements and OSS Threshold.
- No impact on invoice limits — Credit notes do not count against your monthly invoice quota on any plan.
ZUGFeRD Compatibility
docs101 credit notes are fully compliant with the ZUGFeRD 2.x / Factur-X standard and pass KOSiT validation.
Technical details:
| Field | Value | Standard |
|---|---|---|
| Document Type Code | 381 (Credit Note) | UNTDID 1001 |
| Preceding Invoice Reference (BG-3) | Original invoice number + issue date | EN 16931 |
| Line item amounts | Positive values | EN 16931 convention for type 381 |
| VAT category codes | Same as original invoice | EN 16931 |
| Validation | KOSiT Validator | XRechnung / EN 16931 rules |
The Preceding Invoice Reference (Business Group BG-3) contains the original invoice number and its issue date, establishing the formal link between the credit note and the canceled invoice.
Reference Links
- Cancel an Invoice & Credit Notes — Step-by-step guide for canceling invoices and working with credit notes
- Invoice, Customer & Credit Note Numbering — Configure numbering for all document types
- ZUGFeRD and E-Invoicing Formats — Overview of ZUGFeRD and European e-invoicing formats
- The EN 16931 Standard — The European standard for electronic invoicing