What is debit note? 7 basic information about debit note

What is Debit note? How is a debit note different from a credit note? Let’s find out information related to what is the debit note in the article that we provide below!

In commodity trade, especially international merchandise trade, to determine purchases and exchanges of goods, sellers and buyers often use a debit note to mark unpaid debts. So what is a debit note? And what debit note forms are commonly used when trading?

Table of Contents

What is Debit Note?

The concept of debit note appears in the business between two businesses when the seller delivers the goods to the buyer but has not received the payment for the order. After the successful delivery of the goods, the seller uses the debit note as a tool to remind the buyer of outstanding bills or amounts coming due. In addition, the debit note can be used as an adjustment invoice if the invoice value needs to be adjusted or there are errors in the input process.


In addition, the debit note is also used by the buyer to return goods when there is a problem with the order. In this case, the debit note is used to notify returned merchandise and disbursed payments with appropriate reason.

To better understand what a debit note is, the payment accountant should consult and learn about some commonly used debit notes to avoid mistakes when doing business:

Company A buys goods from company B, and during the transportation, the goods are damaged. In this case, Party A wants to send back this goods, so Party A issues Party B a debit note for the purpose of notifying the error number and the cost of the loss. After Party B receives the notice, Party B redefines the shipment information and can return to Party A a credit note for the loss.

Or in another case, company E sells goods to company R with an order value of $ 5000 but on the invoice stating $ 4000, which is the difference from the actual value of the order. So Company E can use debit note to adjust the invoice value to match the actual value of the shipment and send the debit note to company R to report this error.

Depending on each case, each debit note company will be used differently, so to use the right place at the right time should also be considered because at the beginning of the accounting profession, the above concepts are quite unfamiliar. In addition, to further develop accounting skills and understand more deeply about the above information, specialized courses are also a wise choice.

Content on debit note mainly includes information about buyer, seller, name of goods and amount to be paid in the upcoming billing period. The information on the debit note is to specifically identify the object to be reminded and the reminder content to make the transaction between the two parties easier and more transparent.

Once you understand what a debit note is, how to use the debit note is also important. Debit notes are often used in business-to-business transactions. When the supplier ships the goods to the buyer but the payment has not yet been received immediately after delivery. Payment will not be made if no actual invoice has been issued, so these debts will be recorded into the accounting system for easy tracking. Then, as the payment deadline approaches, the supplier begins to use the debit note as a tool to remind buyers of the debt.

Some businesses use debit notes for items that are not their main commodities. For example, an enterprise trading seafood is the main product but needs to sublease cold storage space because it is not used up. In this case, the enterprise can also issue a debit note for the above cold storage rental expenses.

The debit note will not be treated as an invoice because the content of the debit note does not require payment upon receipt of the debit note. The appearance of the debit note is only used to remind and inform the buyer of the upcoming debt payment.

See also: What is investment fund? 5 basic knowledge about investment fund

Type of debit note

  • Debit Note Form is available in a variety of formats, but it is mainly presented in two forms: shipping receipt with the goods received by the buyer and the postcard format.
  • The form of shipping receipt for the goods received by the buyer is used when the buyer has not paid the entire order and the buyer has the right to return the goods if the goods are checked for nonconformity.
  • Postcards are often used to remind buyers of upcoming debts.

Is a debit note a mandatory document?

In fact, debit note is mainly used in transactions between enterprises, so not all transactions, businesses need to use debit notes for buyers. Trader has the option to use debit note or not but usually debit notes are used in a single process to keep all transactions easy. In addition, the debit note is also required by the buyer to use it for internal storage for the company. The use of debit note is completely flexible and highly dependent on the company’s accounting, each company applies a different workflow, which leads to them choosing to use the appropriate debit note form for each situation. However, in order to use debit notes, enterprises will need to develop a suitable workflow so that not only one transaction, but the following transactions, only need to apply the accounting process to inform the buyer in quickest way.

What is credit note?

Credit Note is used as a document provided by the seller with an amount less than or equal to the amount indicated on the invoice. In some merchandise trade cases where the shopper wants to return the defective item or not accept the product, the seller will use credit notes to encourage the buyer to return. It could be said that the seller uses credit note as returning the change to the buyer but by a different method instead of cash.

In some cases the seller gives the buyer credit note if the buyer receives the goods and checks that there is a defective item or the quality is not guaranteed or during the warranty period that the product has a technical fault due to the manufacturer export.

For example, company A buys goods from company B in the quantity of 5,000 pieces. During the transportation, due to an accidental accident causing 200 damages. When receiving the goods, the actual quantity that company B receives is 4800 pieces, so company B will notify company A of this loss. After confirming the information, company B will export it to company A. A credit note is worth the equivalent of 200 damages as the refund. This credit note will be used for the following orders as part of the payment like cash payments and this is completely legal.

What is the difference between credit note and debit note?

Debit notes, also known as debit notes, are issued by the seller for the purpose of reminding or notifying the buyer of an upcoming payment due. In addition, there are a variety of debit notes that are used as an incremental adjustment invoice as a buyer asks the seller to make an adjustment to the merchandise value of the previous order.

Credit note, also known as negative invoice, is issued by the seller for the purpose of a refund to compensate for the returned merchandise or previous invoice.


Although they both mean an adjustment bill, the debit note and the credit note are used for two completely opposite purposes. In a transaction, businesses can apply both types to make the payment easier and more convenient, especially for long-term commodity exchanges.

See also: What is speculation? The 8 difference between speculation and investment

What are the different types of debit notes?

To improve the professionalism in the debt collection process, the seller has used many different forms to be able to issue debt notices to the buyers. Different debit notes will be used for different purposes, so in order to use the correct form of debit note, the accountant needs to learn about other forms of debit note:

  • Type of shipping receipt for merchandise received by buyer: In this type of transaction, the buyer has not yet made full payment for the value of the order to the seller. During this time, if the buyer inspects the product quality and finds that there are many unsatisfactory problems, the buyer can completely return the goods with the shipping receipt to the seller without making a payment. before.
  • Postcard format: This debit note is often used as a reminder of the debt that the buyer needs to pay. Postcard credit notes are often used because of its usefulness when it comes to checking invoices and original issued documents. Merchants also feel that debt collection becomes easier when using postcard-style debit notes.

Depending on the purpose as well as the different circumstances, the seller will use a different type of debit note form.

Here are some typical debit note templates that are commonly used by businesses:

  • This debit note is used in import / export companies, when the seller exports the goods to the port, after the shipping company processes the cargo and dispatches the goods, the shipping line will send a debit note form as above to remind about the the debt for the last order. On the debit note, there will be full content about the seller, the buyer, the order information and the fees incurred for the order.
  • The debit note above is used again in commodity trading companies, where the seller delivers to the buyer and has not received payment. The effect of this debit note form is to remind you of previous order’s debt coming due.

For each company, the accountant will have different debit notes because the goods of each company are not the same and the transaction information is different so it is necessary to create a debit note that is suitable for the specific company set. So when doing accounting operations in different companies, the debit note will have different information, but the main purpose of the debit note is to remind the debt.


Debit notes, also known as debit notes, are used a lot in transactions between two B2B businesses. The use of debit note is optional, so it is up to the company that they choose the method that best suits each transaction. The purpose of the debit note is to verify the transactions that have taken place, so for more professional accounting operations, the use of a debit note is necessary. When working as an accountant in a trading company, it is necessary to learn about debit note forms in order to be effective in the business of the company.

After understanding what a debit note is and how to use the debit note forms, you have the right to choose whether or not to use the debit note. Many small businesses or business individuals believe that the use of these documents makes the transaction become complicated and difficult to control. Business individuals who are interested in fast, easy, and easy transactions, but when using debit notes, they must have a chief accountant to do all kinds of operations. Maybe for business individuals, the order value is not large and the number of customers is not much, so the control is still easy. But for large businesses with strong orders in the month and long-standing customers, using a debit note is essential.

Debit notes are not only published on paper, but the information is also stored in the accounting system to help businesses more control unpaid invoices or notices from customers that need to be resolved. . So if your business is a long time, the application of an accounting system, paper reduction will be the right choice.

See also: Why are Official Receipts so important for business in the Philippines?

5/5 - (2 votes)

Leave a Reply

Your email address will not be published. Required fields are marked *