Deposit refund credit note template
Deposit refund credit note template: return a deposit invoiced in advance, in full after a timely cancellation or in part when the final bill came in lower.
Templates by industry
- Deposit on DEP-0412 returned: cancelled in time
- Deposit above the final bill on DEP-0420
- Deposit for an optional extra not taken
Preparation guide
Example workflow
Identify the invoice and the reason
Example: for "Deposit on DEP-0412 returned: cancelled in time", find the original invoice, note its number and date, and record the reason: a return, a price reduction or a cancellation.
Credit the affected lines
Enter the quantity or amount credited for each affected line, down to "Deposit for an optional extra not taken", so the tax on it is reversed in proportion.
Send and settle the credit
Send the credit note to the customer, then refund the amount or set it off against the next invoice, and keep both documents together.
A deposit invoiced in advance sometimes has to come back. The client cancelled within the free period, the final bill turned out lower than the deposit, or an optional extra paid for up front was never taken. Because the deposit was a real invoice, returning it takes a credit note against that invoice, not a correction of the quotation. This template credits each deposit invoice on its own line and leaves non-refundable fees where they are.
Fields to prepare
- Deliverables and line items
- Deposit on DEP-0412 returned: cancelled in time, Deposit above the final bill on DEP-0420, Deposit for an optional extra not taken: only the lines being reduced or cancelled, with the quantity or amount credited.
- Deposit on DEP-0412 returned: cancelled in time
- Quote the cancellation date and the clause that made the full deposit refundable at that point.
- Deposit above the final bill on DEP-0420
- When the final bill is lower than the deposit, credit only the excess and name the final invoice that shows it.
- Deposit for an optional extra not taken
- An optional extra that was paid for but not used is credited at the deposit taken for it, not at its full price.
- Original invoice
- Quote the number and date of the invoice being corrected, and the reason: a return, a price reduction or a cancellation.
- Settlement
- Say how the credit is settled: refunded to the customer or set off against the next invoice.
- Scope to agree
- Credit the deposit invoice itself, not the quotation, quote the term that makes the amount refundable, and keep any non-refundable part off this note.
Before sending
- Is “Deposit on DEP-0412 returned: cancelled in time” one of the lines being corrected, at the price on the original invoice?
- Is the quantity or amount credited for “Deposit above the final bill on DEP-0420” no more than was invoiced?
- Does the customer know why “Deposit for an optional extra not taken” is credited: a return, a price change or a cancellation?
Show 3 more
- Credit only the affected lines, and reverse the tax on them at the rate the original invoice used.
- Give the credit note a number of its own rather than reusing or changing the original invoice number.
- Agree with the customer whether the credit is refunded or set off before you send it.
Worked example with sample figures
The figures below are invented to show how the template adds up: 3 lines in USD, with an example tax rate of 8%.
| Item | Quantity × unit price | Amount |
|---|---|---|
| Deposit on DEP-0412 returned: cancelled in time | 1 × $900.00 | $900.00 |
| Deposit above the final bill on DEP-0420 | 1 × $135.00 | $135.00 |
| Deposit for an optional extra not taken | 1 × $220.00 | $220.00 |
| Subtotal | $1,255.00 | |
| Sales tax (8%) | $100.40 | |
| Total | $1,355.40 | |
Credit before tax $1,255.00, sales tax reversed $100.40, total credited $1,355.40.
- The credit corrects invoice DEP-0412.
What the document must show
The details a credit note has to show, and why each one matters, are set out in the guide below.
The sales tax depends on where the work is supplied, so set the rate that applies to your customer before sending.
Official rate reference: US government: state and local taxes
Full requirements: Credit note vs invoice (and credit memo): how to issue one
Frequently asked questions
Do I credit the deposit or simply transfer the money back?
Both: the credit note corrects your books and the customer’s, and the transfer pays the money. Quote the credit note number in the payment reference so the two can be matched.
Is the tax on the deposit refunded as well?
If tax was charged on the deposit invoice, it is normally credited in proportion with the deposit. Rules on advance payments differ, so check with your adviser how the original tax was reported before you set the rate.
How is the sales tax worked out on this credit note?
The worked example above uses an example rate of 8%: $100.40 on a net amount of $1,255.00, for a total of $1,355.40. The editor recalculates all three when you change a quantity, a price or the country.
Is this template free?
Yes. You can fill in this template and print it or save it as a PDF without an account, and there is no payment step and no watermark on the document. Saving it to your account and downloading Excel or Word files need a free account.
Can I download it as Excel, Word or PDF?
Yes. A PDF needs no account: fill in the template and use Print / PDF. The Excel and Word files download from this page with a free account, and the spreadsheet keeps its formulas, so changing a quantity updates the tax and the total.
Read next
Reading for the Deposit refund credit note template: Credit note vs invoice (and credit memo): how to issue one and Unpaid invoice: follow-ups, part payments and statements. The VAT and GST calculator helps you credit the tax that went with the goods.