Check a requested credit note before using it to unlock part payment

The customer asks for a credit before paying

A customer says it will pay most of the invoice if you issue a credit for the disputed item. Before making the entry, clarify what is being proposed and obtain appropriate advice. A credit note can have accounting and commercial consequences. Do not issue one merely to make the payment system accept a smaller amount while assuming the disputed claim remains unchanged.

Identify the customer's stated reason

Imagine a subcontractor with an unpaid base invoice and disputed variation. The accounts team requests a credit for the variation, saying it is required to process payment. Ask whether the request reflects an agreed correction, a proposed settlement or an internal processing preference. Keep the response. Those explanations raise different questions and should not be collapsed into a generic instruction to reduce the bill.

Keep invoice changes traceable

business.gov.au recommends maintaining clear invoices and tracking payments. Give the accountant the original invoice and request so any legitimate adjustment is properly recorded. Preserve the history. Do not delete the invoice or alter an earlier version to make the dispute disappear from the ledger. A clean-looking account should not conceal what was originally charged or why it later changed.

Source: business.gov.au: How to invoice

Ask about the claim consequences

Send the request and proposed response to the relevant adviser, particularly where formal payment processes or settlement terms may be affected. In the subcontractor example, reducing the amount in the system might be understood differently by the parties. Ask how the intended position should be documented rather than relying on an informal note that the credit is only for administrative convenience.

Consider the actual agreed route

Once advised, make sure the customer and authorised decision-maker understand what is being done and what payment is expected. If the request is not accepted, seek an appropriate alternative process for the proposed part payment. Do not promise a legal effect that the adviser has not confirmed, or assume the customer's software requirement determines your contractual position.

Reconcile the outcome afterwards

Check any credit, receipt and remaining balance against the documented agreement. Keep unresolved items visible and respond to further discrepancies promptly. The aim is to enable accurate payment processing without accidentally changing the dispute through an unexplained accounting entry. A requested credit note deserves the same attention as the commercial proposal it may represent.