Update Invoice for Order Adjustments

How it works

When an order is adjusted, the app must keep the invoice, refund transaction, and bank reconciliation aligned.

• If funds are returned to the customer, a credit note is created and applied to the original invoice. This is required because a cash movement occurred — the credit note lets the app record the refund payment against the invoice, so the invoice balance, refund transaction, and bank reconciliation all match.
• If no funds are returned (for example, an exchange or an internal adjustment), the app can either:
  • create a credit note (traditional audit-trail approach), or
  • update the original invoice to reflect the final payable amount (clean-ledger approach).

Methods

1) Credit note method — app default (setting: off)

What it does: Creates a separate credit note that offsets the original invoice, even if no cash was returned.

• Pros
  • Strong audit trail: the original invoice stays unchanged and an explicit credit note documents the adjustment.
  • Clear record of every adjustment for historical accuracy and compliance.
• Cons
  • Can clutter the ledger with many small credit notes (especially for exchanges or internal adjustments with no bank movement).
  • May make month-end bank reconciliation more time-consuming.

2) Update invoice method (setting: on)

What it does: Edits the original invoice so the total reflects the exchanged or returned amount, instead of creating a separate credit note.

• Pros
  • Cleaner ledger with fewer documents.
  • Final invoice total matches the actual amount paid — simplifies reconciliation and reporting.
• Cons
  • Requires the accounting system to permit editing of previously approved invoices.
  • If the reason for the change isn't recorded clearly (e.g. in notes or edit history), it can be less visible in the audit trail.