Apply Credit Notes to Existing Invoices

Problem Statement

Admins currently lack a clear way to apply credit notes directly to invoices, making it difficult to properly adjust invoice balances after an invoice has been created.

User Story

As an admin,

I want to be able to apply a credit note directly to an existing invoice,

So that I can accurately adjust the invoice balance after it has been created.

🎯 Definition of Done (DoD)

A feature is done when:

.Functional Requirements

1. Admin users can apply one or multiple existing credit notes to an open invoice from the invoice details page.

2. Admin can:

   1. Select a credit note.

   2. Enter the amount to apply (up to the lesser of invoice balance or remaining credit balance).

3. System automatically:

   1. Deducts the applied amount from the invoice outstanding balance.

4. Invoice status updates automatically:

   1. If fully covered → status becomes Paid.

   2. If partially covered → remains open.

5. System prevents:

   1. Over-application beyond invoice balance.

6. All applications are logged on invoice logs.

UI Requirements

1. “Issue Credit Note” action visible on invoices action list in invoice details page.

2. Modal shows:

   1. Input for Reason

   2. Input field for amount to apply.

3. Real-time validation prevents invalid amounts.

4. Success and error messages are clearly displayed.

5. Webhooks triggered → Invoice updated

Accounting impact:

1. Include credit notes under AR if they are not associated with a refund. If there is a refund, it will be recorded under the customer balance.

2. For the counterbalance, it will be recorded under deferred revenue or recognized revenue, depending on the scenario.