Credit note with VAT

What the credit note with vat does

When a customer returns goods or you correct an invoice, the right document is a credit note, not a deleted invoice. This template lists the items being credited, works out the subtotal, the VAT and the total credit, and records the original invoice number and the reason, ready to print or save as a PDF.

Who it is for

VAT-registered businesses and anyone who issues invoices and needs to correct them properly, and accountants who must show KRA how a sale was reversed.

How to use the workbook

1. Check the VAT rate on the Rates sheet.
2. Fill in the credit note number, date, customer and the original invoice number.
3. List each item being credited with its quantity and price.
4. Print or save as PDF and send it to the customer.
5. Save a copy under a new name for each month or year, so earlier records stay as they were.

What is inside

• Original invoice and reason recorded
• Up to 15 line items
• Subtotal, VAT and total credit worked out
• VAT rate on the Rates sheet
• Print-ready layout

The workbook has these sheets: Instructions, Credit note, Rates. The main table has the columns Description; Quantity; Unit price; Line total. Yellow cells are for you to fill in and grey cells calculate by themselves, so leave the grey cells alone. The example rows show how it works; type over them with your own entries.

Tips for getting it right

• Always refer to the original invoice number.
• If you use eTIMS, issue the credit note through the system too.
• Adjust your VAT return for the credit in the right month.
• Keep a copy with the original invoice.

Why keep this record

Accounting records let you answer three questions at any time: what came in, what went out and who owes whom. Kept consistently they also make tax returns, loan applications and the sale of a business much easier, because the evidence is already organised. Entering transactions the day they happen is far cheaper than reconstructing them at year end.

Questions people ask

Do I need to know Excel formulas? No. Type into the yellow cells and the rest is worked out for you. The formulas are visible if you want to see how a figure is reached.

Can I add rows or change the layout? You can add your own columns to the right and your own notes. If you insert rows inside a table, copy the grey formula cells down so the new rows calculate too.

Will it work on my phone or in Google Sheets? Yes for viewing and typing, but dropdown lists and the charts look best in desktop Excel or LibreOffice.

Keeping it safe and up to date

Good accounting records are a legal duty as well as a management tool: keep the supporting receipts and invoices with the workbook, and keep each year's copy for at least five years. Work on a copy, never on your only file, and back it up.

Read how to keep business records for KRA for the wider picture. Free calculators that go with it: Vat calculator. See more accounting templates or ask us for a custom one.

The workbook works in Microsoft Excel, LibreOffice and Google Sheets. It is a tool to help you work out and record figures, not tax, legal or accounting advice, and it is not affiliated with the Kenya Revenue Authority. If something does not work as described, contact us and we will put it right.

Related guides, calculators and templates

• Free calculator: VAT Calculator
• Guide: VAT for small businesses in Kenya: when to register and what to charge
• Guide: How to file a VAT return on iTax, step by step
• Guide: How to price your products and services: markup, margin and break-even
• Another template: Customer invoices and aged receivables tracker
• Another template: Expense tracker with VAT
• Another template: Invoice with VAT

Need something different? Request a custom template, browse all guides or see every Excel template.