5 Replies Latest reply: Dec 4, 2009 7:41 AM by Rajesh Banka RSS

Difference between invoice and debit note

sachin arora
Currently Being Moderated

Hi,

 

what is the difference between invoice and a debit note.

 

If I underinvoice a customer, should I raise a additional invoice for the difference or shud i raise a debit note. if  i need to raise debit note, then why not invoice or if i need to raise an invoice, then why not a debit note

 

regards

sachin

  • Re: Difference between invoice and debit note
    KARTHIK KRISHNAN
    Currently Being Moderated

    Dear Sachin,

     

     

    Debit Notes are Transactions signifying a payment that your Customer Owes you, just like Invoices. In fact structurally they are very much like Invoices. Though they have a different meaning. Invoices always depict Sales or Service rendered , while Debit Notes on the other hand are used for deducting money from your Customer's Account without a sale being made.

     

    Debit Notes are always raised for doing adjustments in the Accounts and is not for invocing a sale to Customer. Invoices are always raised against the sale.

     

     

    Hope it is clear.

     

     

    Regards,

    Karthik

  • Re: Difference between invoice and debit note
    Reazuddin. MD
    Currently Being Moderated

    Debit note is generally used to issue an invoice for already sold goods w/o physical goods movement involved.

    If raw material prices increases which are utilized in production of Finished goods. then the business will submit the relevant documents as proof at customer.

                  Once Customer is accepted, then price increase effective date will be finalized , Then business issues debit note request for the required material & its converted into debit note. ( all this will be done, based on agreement with the Customer). Generally this scenario is most widely used in Manufacturing / Automobile industry.

     

     

    where as, If invoice is created with less price than actual, you dont need to create debit note, instead you can either Cancel this invoice or create Invoice Correction request.

     

     

    hope it adds info

  • Re: Difference between invoice and debit note
    G Lakshmipathi
    Currently Being Moderated
    what is the difference between invoice and a debit note.

     

     

     

    Simple difference is that Invoice will always be generated when goods leave the delivering plant.  Raising a debit note is like doing a post mortem job.

     

     

    thanks

    G. Lakshmipathi

  • Re: Difference between invoice and debit note
    Pradyumna patel
    Currently Being Moderated

    Hi

     

    Suppose, you have delivered 10 units to the customer, created an Invoice (Billing document)for it ,in which you have charged for 8 units or you were supposed to charged Rs.100per piece but you have charged Rs.95 per pieces.

     

    In this case, your Invoice is incorrect an incorrect one. So, in this case either you need to go for cancelling the said invoice and create a new one.

    If you do not want to go for cancellation, then you need to go for Invoice correction process and ultimately it will lead to a Debit memo for the difference from the Invoice correction request.

     

    Now, there will not be any goods movement in this case as you creating a Billing document (Debit memo) for the goods already delivered. Debit memo is an Order-related Billing document, no delivery associated with it.

  • Re: Difference between invoice and debit note
    Rajesh Banka
    Currently Being Moderated

    Invoice is raised for goods or services supplied to Customer. For example:

    Scenario: Sale of Goods

    When a TV is sold to customer A.

    Scenario: Service rendered.

    TV is out of Warranty and customer wants to get the same serviced. Providing Service is possible, but the customer will have to pay for the same.

     

    Debit Note is a document which is raised in the cases as below:

    Price difference

    or

    as a compensation against some damage done to returnable material

    or

    Advertising / Promotions on cost sharing basis

    & so on..

     

    Regards,

    Rajesh Banka

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