When a client wants to return a product that he had bought earlier due to a change of mind or unavoidable reasons, a credit note is issued. In this case, you go to the Invoice that was already created for the customer. While there, you need to click on the add credit note button and it will give you options of how you want to issue the credit note.

-Full refund option, where you give the client all of his money

-Partial refund option, where a part of the funds are refunded

- Full refund and new draft invoice, where the caller would like to purchase something else but still would like a full refund before doing so.

Once an option is selected, the credit note will automatically be auto-validated and reconciled with the original invoice.

You can decide to add reasons for the refund, and reversal date, choose a specific journal and change the refund date. The journal will be auto-filled because it will be picked from the invoice. The reasons for refund and reversal date have to be input manually or selected. 

Once you’re done the credit is automatically posed and reconciled with the original invoice, it will have its unique sequence number. 

The journal items on a credit note are the complete reversal of an invoice, the receivable amount is on the credit side and the income account is on the debit side.  The original invoice will be indicated as reverse showing that a credit note was issued. 

Unlike a full refund where the credit note is automatically posted, a partial refund creates the credit, not in the draft, and can be edited before it is posted/ issued.  On the original invoice it will not indicate as paid but as partial since only a part of that invoice has been paid.