A credit note is in fact a negative invoice. It is a way to show your customers that he doesn't need to pay the full amount on the invoice. A credit note can fully cancel an invoice for the same price on the invoice, or possible less than the invoice. The supplier uses a credit note to mention the products, the amount of products and service prices that both parties agreed to. Normally, the credit note refers to the original invoice and the reason that a credit note is made. The credit can be used to refund money to the customer or can be used on future purchases.