Update Invoice for Order Adjustments

Setting name: Update invoice for order adjustments

Where to find it: Setup - Advanced. Click Turn on and confirm.

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).

Refunds That Return No Money

With the setting on, a refund that returns no money does not raise a credit note. That covers a refund with no payment attached, a refund of 0.00, and a voided one. It happens, for example, when you remove an item from an order.

When an item is removed and the invoice isn't paid yet, the app updates the invoice to the new total instead. If the invoice has already been paid, see the next section.

With the setting off, each of those refunds raises its own credit note, even though no cash moved.

If the Invoice Has Already Been Paid

Xero does not let you edit an invoice that has payments or credit notes allocated to it. If your customers pay at checkout, most invoices are already paid by the time an order changes, so this setting will rarely update an invoice. When it can't, the app leaves the paid invoice as it is and raises no credit note, so Xero keeps the original amount.

The order can show as posted in the app while your Xero invoice no longer matches the Shopify order. If the invoice is only partly paid, the order shows an error instead. Re-posting the order from the app can also change the payments on the invoice, so email us first at help@hyvelabs.co with your shop URL and the order number.

If your customers pay at checkout, email us before you turn this setting on.

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.

B2B: finishing invoices in Xero

Some wholesale stores post each order once as a Draft and finish the invoice in Xero, for example to set final quantities or weights before approving it. For this to work, the app has to leave the invoice alone after it posts.

1. Under Auto sync orders on Setup - Advanced, choose Include unpaid orders so orders on payment terms post when they are placed.
2. Under Post invoices as Draft or Approved, set both options to Draft.
3. Keep Auto sync orders on order fulfilled and Auto sync orders on order updated turned off, so later changes to the Shopify order do not update the invoice.
4. Make quantity, weight and discount changes in Xero only, not in Shopify.
5. Do not re-post these orders from the app, because a re-post overwrites the invoice.

Refunds still create a credit note. A credit note cannot be applied to a draft, so apply it in Xero after you approve the invoice.