When you need to correct an error in an Actionstep Practice Management invoice, a best accounting practice is to use a credit note. Credit notes allow you to adjust or reduce the amount billed on an invoice, often due to an overcharge, billing error, or service adjustment.

When issuing a credit note, you can either create a partial credit (which allows you to identify which fees and disbursements on an invoice you want to credit) or create a full credit (which allows you to credit all fees and disbursements on an invoice and remove the WIP from the invoice so it can be rebilled).

Before you begin:

• To return WIP to a matter when creating a credit note, go to Admin > General Settings > Feature Preview and toggle Credit notes return WIP to the matter to on.

NOTES:  
• If you are using a Xero/QuickBooks integration, this is the recommended way to perform a write-off as it will be replicated in the accounting package that you have integrated with Practice Management.
• If you create a full or partial credit note and then delete it due to an error, the option to create a full credit note again is no longer available. This is intentional. Because you can return WIP to the matter, issuing this action multiple times will cause issues with the WIP. To work around this issue, either create a partial credit note and create all of the WIP manually, or delete the original invoice and reissue it, which will make the Full Credit option available again.

Creating a Partial Credit Note

Note: If you want to view disbursements/expenses separately as hard and soft costs in this workflow, your admin can go to Admin > General Settings > Feature Preview and toggle Split Soft and Hard Invoice Credit to on.

To create a partial credit:

1. In Practice Management, view the matter with the invoice you need to credit. (See Editing a Matter for details.)
2. Click the Billing menu icon. The Billing page appears.
3. Click Invoices / Bills on the list of options on the left. A list of invoices appears.
4. Click the invoice number for the invoice you want to credit. The Sales Invoice window appears.
5. Click the More link along the bottom of the window and choose Create partial credit.
   The Create Credit window appears.
6. Provide the following information:
   • Credit date: Enter the date the credit is to be created for this invoice. Please note that this is not the date that it will be applied. That date will be assigned when you apply the credit note.
   • Credit No: Review the credit note number (which always includes a CR prefix).
   • Quick-code: Click this option to apply or create a quick code to classify a recurring transaction. For example, if you are using credit notes to write off outstanding debt due to having an integration, you can create a quick-code called CR - Outstanding Debt. If you create a new quick code, make sure you select Client / Customer Receipts so that it will appear as a credit note quick-code.)
   • Reason for credit: Enter your reason for giving the credit.
   • Bill template: Click the drop-down list and choose the credit note template you want to use for sending the invoice. Your credit note can use the same template as your invoices or it can be customized.
   • Sub total: Review the subtotal amount for the invoice.
   • GST / VAT / Tax: Review the tax amount.
   • Total amount to credit: Review the total amount to be applied in the credit note. (This number is updated as you specify the credit amounts in the fields below.)

7. Review and make adjustments in the Fees to credit and Expenses to credit sections. 

   Note: The fields in these sections show the details of the amounts that are to be credited and how this will affect the fee or disbursement / expense allocation. For example, you may be crediting part of the invoice but you would like to attribute this credit note to another user who is working on the file. In this case, you can apportion the credit note here as needed.

8. In the Fees to credit section, review the individual fees, make any adjustments to the fields, and enter the Amount you want to credit back.  

9. In the Disbursements / Expenses to credit section, review the individual expenses, make any adjustments to the fields, and enter the Amount you want to credit back.   

   Note: Your admin may have chosen to display disbursements / expenses as hard and soft costs, in which case you will see two sections: Soft/Anticipated costs to credit and Hard costs to credit. The fields in these sections work the same as described in the information for the Disbursements / Expenses to credit section.

10. Click Save to save your changes and create the credit. You are returned to the Sales Invoice window.
11. Take note of the credit invoice number (which is displayed in the window title). You will need this number when you apply the credit later.
    
12. Once you create a partial credit note, you must apply it. See Applying a Credit Note for details.

Creating a Full Credit Note

When you create a full credit note, you can credit all fees and charges on an invoice and remove the WIP from the invoice so it can be re-billed. For example, if a fee earner recorded a total $1,000 of time on an invoice, after the credit they have a total of $1,000 of time to be invoiced again.

To create a full credit:

1. In Practice Management, view the matter with the invoice you need to credit. (See Editing a Matter for details.)
2. Click the Billing menu icon. The Billing page appears.
3. Click Invoices / Bills on the list of options on the left. A list of invoices appears.
4. Click the invoice number for the invoice you want to credit. The Sales Invoice window appears.
5. Click the More link along the bottom of the window and choose Create full credit.
   The Full Credit Invoice window appears.
6. Enter a Credit date and a Credit No.
7. Review the fees, disbursements, and taxes you are crediting and enter a Reason for full credit.
   
8. Click Create full credit. The credit note is created and any WIP and/or disbursements that were part of the original invoice will be reinstated to the matter so they can be adjusted and re-invoiced again if you choose to do so.

Once you create a full credit note, you must apply it. See Applying a Credit Note for details.

Updated May 15, 2026 20:39