Debit vs. Credit Notes: Key Differences and Uses
Debit and credit notes are essential accounting tools used to adjust or correct invoices. A Debit Note is issued by a buyer to increase the amount owed to a seller, often due to returned goods or billing errors. It reflects a reduction in the seller’s revenue. On the other hand, a Credit Note is issued by a seller to decrease the amount due from the buyer, often as a result of overcharging, returned goods, or discounts. Both notes help maintain accurate financial records, ensure correct invoicing, and facilitate smooth transaction adjustments in business operations.