# Credit Note Rules

A credit note reverses all or part of an invoice that has already been signed.
KRA checks every credit note against the original invoice and rejects any that
breaks one of the rules below.

## Rules

| Rule | What it means |
|------|---------------|
| The original invoice number must be valid | The invoice you credit has to exist already and have been processed, and its number has to appear on the credit note. |
| A partial credit note must not exceed the original invoice amount | Any credit note you issue after the first one still has to stay within the amount of the original invoice. |
| A full credit note must not exceed the original invoice amount | The amount on the credit note cannot be higher than the amount on the original invoice. |
| The original invoice must be less than 6 months old | You have 6 months from the date the original invoice was issued to raise a credit note against it. |
| Only one partial credit note per invoice | A trader gets one partial credit note per invoice. Any credit note after that has to be a full credit note. |

## Types of credit notes

### Full credit note

You issue a full credit note when the whole amount on the original invoice goes
back to the buyer. For example:

- You sold services and products to a patient and the payer rejected the full claim.
- You sold products and the buyer returned all of them.

### Partial credit note

A partial credit note credits back only part of the original invoice. Three
situations call for one.

#### Quantity changes

The buyer returns some of the goods sold, say because they arrived damaged. The
seller edits the quantity on the credit note, and the credited amount is the
returned quantity multiplied by the unit price.

> You sold a buyer 30 bottles at KSh 100 each, a total of KSh 3,000. The buyer
> later found 10 of them damaged and returned them. The credit note carries the
> 10 returned bottles, so the credited amount is 10 × KSh 100 = **KSh 1,000**,
> and that is what you return to the buyer.

#### Price changes

The buyer was overcharged for an item. The seller edits the unit price of that
item on the credit note, and the credited amount is the quantity times the new
unit price.

> As a provider you invoiced a patient belonging to Jubilee a total of
> KSh 20,000, of which KSh 5,000 was copay that you did not collect. The payer
> paid the claim minus the copay, sending only KSh 15,000. You send a credit
> note of **KSh 5,000** to eTIMS to show that part of the cost was not paid.

#### Removed items

A buyer who bought several items wants to return one of them in full, perhaps
because they no longer want it. That whole item is credited.

> You sold a buyer 30 bottles, 20 boxes, and 15 laptops at KSh 20,000 each. The
> buyer wants to return the laptops because they no longer have the money. The
> credit note carries the laptop quantity times its unit price, so the credited
> amount is 15 × KSh 20,000 = **KSh 300,000**, and that is what you return to
> the buyer.

## See also

- [Credit Note Reasons](/docs/eTIMS/References/Sales/Credit-Note-Reasons) for the
  `rfdRsnCd` codes you set on a credit note.
- [Transaction Progress](/docs/eTIMS/References/Sales/Transaction-Progress),
  since an invoice moves to `05` (Credit Note Generated) once a credit note is
  raised against it.