How to cancel an invoice you already sent (and credit note vs refund)

Short answer: if the invoice is still a draft that nobody has seen, you can delete it or change it. If you already sent it, do not delete it. Cancel it with a credit note for the full amount, which keeps the invoice number and the record. To lower the amount instead, issue a credit note for part of it. A refund is different: it is money you send back.

Can you delete an invoice?

You can delete a draft, because it never left your hands. Once an invoice is sent, treat it as part of your records. Your client may have entered it in their books, your invoice numbers would have a gap, and your accountant or tax office may ask to see it later.

Invoicing tools follow the same rule. Stripe's documentation, for example, says: "You can't delete a finalized invoice. To cancel it, change its status to void." It also says voiding "maintains a paper trail". Rules on how to cancel or correct an invoice differ by country, so check with your accountant if you are registered for VAT or sales tax.

What is a credit note?

A credit note is a document that reduces or cancels an invoice you already issued. It has its own number and date, and it names the invoice it corrects. The original invoice stays as it was; the credit note sits next to it and changes the amount due.

In the UK, HMRC's VAT guide (section 18.2.3) says a valid credit note must reflect "a genuine mistake or overcharge or an agreed reduction in the value of the supply". It must show its own number and date, your details and your customer's, the amounts and the VAT rate, and "the number and date of the original VAT invoice or invoices". Other countries have similar rules.

Credit note vs refund: what is the difference?

A credit note changes what your client has to pay. A refund is money going back to your client. You often need both: the credit note to correct the invoice, and a refund if the client had already paid.

	Credit note	Refund
What it is	A document that lowers or cancels an invoice	Money you send back to the client
Does money move?	No	Yes, from your bank or payment app
Use it when	The invoice was wrong, a discount was agreed, or the job was called off	The client paid more than they now have to pay
If the invoice was unpaid	Less, or nothing, is due	Not needed
If the invoice was paid	The client now has credit with you	You pay that credit back, if they want it back

Cancel or reduce: which one do you need?

• Cancel the whole invoice when the job was called off, the invoice went to the wrong client, or you are replacing it with a new one.
• Reduce the amount when there was a mistake in a price or quantity, you agreed a discount after sending, or some goods came back.

If you cancel and send a corrected invoice, the new one gets a new number. Mention the old number in its notes so your client can match the two.

How to cancel an invoice in Inbill

Once an invoice has been sent, shared or downloaded, its menu shows Cancel invoice instead of Delete. Drafts can still be deleted.

1. Open the invoice and tap Cancel invoice. The window that opens is called "Reduce or cancel".
2. Choose Cancel the whole invoice, or Reduce the amount and type how much to take off and why: a mistake on the invoice, an agreed discount, returned or not delivered, or something else.
3. Add a note for the client if you like. A line at the bottom tells you what will happen before you confirm.

Inbill then makes a credit note with its own number (CN-YYYY-NNNN). If the invoice had tax on it, the credit note takes off tax in the same proportion. A cancelled invoice shows as "Cancelled" in your list, and the page behind the client's link says: "This invoice has been cancelled by the sender. Nothing is due on it." The invoice number is never used again.

If the client already paid, that money is kept as credit for them, to use on their next invoice. Or, if you have already sent it back yourself, tick the box that says you already paid it back, and pick how. Inbill never sends money; it only records the refund you made. You can also tell the assistant "Cancel INV-0042, the job was called off" and check the change before it is applied.

Credit notes and cancelling are free on every plan. The credit note also shows on the client's ledger; see the client ledger.

What to tell your client

Say what changed and what they should do now, in two or three lines:

Hi Sara, I've cancelled invoice INV-0042 because the shoot was called off, so nothing is due on it. You'll see a credit note, CN-2026-0007, for the full amount. Thanks for letting me know early.

If they had paid, add whether you are keeping the money as credit or sending it back, and when. For money that arrives twice or is too much, see what to do when a client overpays.