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Credits

← Credits Overview

Credits, put simply, are statements about money you owe to someone else.

Understanding Credit

A business may owe money to a supplier or reduce the amount that a buyer must pay. Consequently, it records these events as credits.

Think of the following use cases:

  • Self-billing: You purchase goods or services from a supplier, and instead of receiving an invoice from them, you issue a credit.
  • Marketplace: You sell products that are delivered by a participating organization. You receive your customer's money, but you have to pay out the fulfiller – issuing a credit.

Other examples for issuing credits include invoice corrections or overpayments.

The written evidence of such an event is typically called a "credit note" or "credit memo", or short credit.

Note

Be aware that in some jurisdictions (including Germany), credits and cancellations have different legal foundations and taxation effects, and must therefore be applied properly. For details on possible use cases, see Invoice Correction.

Credits in JustOn

In JustOn Billing & Invoice Management, credits are invoices with a negative amount and, consequently, the class Credit. They represent statements about money you have to pay to someone else.

As invoices do, credits have different statuses according to the business requirements.

  • Draft: Like usual invoices, new credits have the status Draft.
  • Open: After finalization, a credit becomes Open and due to be settled.
  • Settled: Once the corresponding payments are refunded or you have generated a new invoice that outweighs the credit amount for the account, the credit is set Settled.

To issue a credit, you create a new invoice with a negative payment amount. There are two ways to do so, which cover the mentioned use cases:

Self billing or marketplace

You create a new invoice with invoice line items that yield a negative invoice balance.

In Germany, this is called credit under tax law ("steuerrechtliche Gutschrift") according to German VAT Act (UStG), Art. 14 (2).

Self-Billing Credits

Invoice corrections

You create a partial credit based on an an existing invoice.

In Germany, this is referred to as a credit under commercial law ("handelsrechtliche Gutschrift").

Partial Credits