Credit note is also known as credit memo, is a form or letter sent by a seller to a buyer, stating that a certain amount has been credited to the buyer's account. A credit note is issued in various situations to correct a mistake, such as when (1) an invoice amount is overstated, (2) correct discount rate is not applied, (3) goods spoil within guaranty period, or (4) they do not meet the buyer's specifications and are returnedYou can do this in two different ways.
Option A: On your dashboard, go to sales > credit notes or click on plus sign > create credit note
Option B: You can also create a credit note from another document type (for example an invoice). Under the menu item Sales go to the relevant document type from which you want to create a credit note. Once in the document, click Action and click Create credit note . You can then enter, finalize and send the details for the credit note.