Credit notes vs refunds
They travel together but they are different acts: the credit note fixes the books; the refund moves the money. Understanding the split keeps returns clean.
The credit note reverses the sale
It is the anti-invoice: negative lines, reversed tax, restocked (or written-off) goods. The original invoice stays in history; the credit note stands beside it. That pairing is what auditors want to see.
The refund moves the money
Cash back, card reversal, or a credit left on the customer's account for next time. In SeroBooks the return flow asks which — and 'store credit' is just a credit note with no money movement yet.
Why never delete
A deleted invoice takes its tax, stock movement and audit trail with it — and leaves a numbering hole the CRA reads as a flag. Reversal by document preserves the story; deletion destroys it.
Two questions, not one
A return asks what happens to the money and, separately, what happens to the goods. Software that merges them forces staff to record something untrue — usually restocking a broken item because that was the only path to giving money back.
Keep them separate and every real-world case has an honest answer, including the awkward one where the customer keeps the goods and the money comes back anyway.
Damaged is not a smaller restock
Choosing 'damaged' is what stops an item being sold again, and for serialized goods it retires that specific unit permanently. Choosing 'restock' puts it back into sellable stock at the location it was sold from. Using restock for broken goods is the single most common way a stock file drifts from reality.
Credit can only sit on a named account, so a walk-in return is refunded rather than credited — the software will not create money owed to someone it cannot identify.
What SeroBooks does with this
Returns are raised from the original invoice, which caps them at what is still returnable and at the price actually charged. Tax reverses with the line at the rate it was sold at, including grouped rates splitting back into components.
A credit note is its own document with its own ledger posting — never a negative invoice, never a deleted sale — so sales history stays intact and auditors stay calm.
See it in your own numbers.
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