> ## Documentation Index
> Fetch the complete documentation index at: https://docs.meteroid.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Create and manage credit notes

## Create a Credit Note

Credit notes can only be created from **finalized invoices**, regardless of their payment status.
To create one, go to **Billing > Invoices**, open the relevant invoice, then click **Actions > Create Credit Note**.

## Credit Note Types

### Credit Note Scope

When creating a credit note, you can define what should be credited:

* Credit specific line(s): You can select one or several invoice lines to cancel or adjust. This is useful for partial corrections (e.g., overbilling on a specific component).
* Cancel the entire invoice: Choose this option to fully cancel the invoice.

  💡**Note:** If you cancel the entire invoice, you can select the option “Also open a corrected draft invoice”. Meteroid will automatically create a new draft invoice replicating the original data, which can then be edited by clicking Actions > Edit Invoice. If you do not choose this option during the credit note creation, you can always go back to the fully credited invoice and click Actions > Create Corrected Invoice to generate a new draft invoice replicating the original data.

### Handling Credited Amounts

If the invoice is marked as Paid or Partially Paid, you will be able to choose how the credited amount is handled. 2 options can can chosen :

* **Credit to Customer Balance**, the credited amount is added to the Customer’s balance and will automatically be applied to future **recurring invoices**.

💡**Note:** This balance is not used for manually created invoices.

💡**Note:** This balance is credited even if the associated invoice's payment status is unpaid or partially paid.

* **Refund**, the credit note indicates that the Customer should be refunded.

💡**Note:** Refunds are only available for paid or partially paid invoices.

💡**Note:** Refunds are **not handled by Meteroid** and must be processed on your side. Meteroid only records the credit note for accounting and tracking purposes.

## Managing Credit Notes

All issued credit notes can be found in **Billing > Credit Notes**, where you get an overview of their amount, status, associated invoice, and Customer.

💡 **Note:** Unlike invoices, once finalized, credit notes are not automatically sent by email to Customers.