- What is a correction note?
- Correction note – what is it used for?
- Who issues the correction note?
- Correction note – what must it contain?
A correction note is a tool used to correct minor errors on invoices. Although most often used by invoice recipients, a correction note is a document that requires the invoice issuer to agree to make changes. Here, we discuss exactly what a correction note is, what functions it performs, who can issue it, and what elements it must contain.
A correction note is a document that allows you to correct minor mistakes on an invoice. It is an alternative to the correction invoice, which the seller issues in case of more serious errors, such as an incorrect amount of tax or inaccurate value of goods. The correction note is often used when the invoice contains minor errors in formal data, such as typos in the contractor’s name, an incorrect address, or a VAT number.
Unlike a correction invoice, which the seller issues, a correction note is issued to the recipient, i.e., the buyer. Thus, it is a tool that allows you to quickly and easily correct an invoice without involving the issuer in correcting formal errors.
What is a correction note?
A correction note is a document that corrects incorrect formal data on an invoice. In the case of minor mistakes, such as a wrong address, VAT number, or a typo in the company name, the buyer of goods or services has the right to issue a correction note and send it to the invoice issuer. This avoids issuing a correction invoice involving a more complex accounting process.
The correction note allows you to correct such elements as:
- typos in the company name,
- incorrect company address,
- incorrect tax identification number,
- incorrect date of sale,
- bank account number (if it is given on the invoice).
Note that a correction note is not a document that corrects values on an invoice. It cannot be used to correct such elements as unit price, quantity of goods, gross value, or VAT amount. A correction invoice is used for such corrections, which the seller must issue.
Correction note - what is it used for?
The correction note is used in situations where there are minor formal errors on the invoice that do not affect the amount of the transaction or the value of the tax. It is a document that aims to keep financial records in order while making life easier for both parties to the transaction. Correction notes allow you to easily and quickly correct errors that could lead to misunderstandings or problems during a tax audit.
In practice, the correction note is a convenient solution, as it can be a simple process of correcting the entire document. Its issuance is relatively simple, and it is possible to avoid re-generating the invoice.
Who issues the correction note?
The correction note is issued by the recipient of the invoice, i.e., the buyer of goods or services. It is worth noting that the seller cannot issue a correction note. If the seller notices errors on the invoice that cannot be corrected with a correction note, he must issue a correction invoice.
The procedure for issuing a correction note is as follows:
- The buyer notices an error in the invoice that can be corrected with a correction note (e.g., a mistake in the address or VAT number).
- The buyer issues a correction note indicating the erroneous information and the correct version.
- The correction note is then sent to the seller, who should accept it and acknowledge receipt.
Although the seller’s acceptance of the correction note is not formally required, it is recommended from the legal and accounting security perspective. Confirmation of acceptance of the correction note can be done electronically, for example, by email, which facilitates the workflow process.
Correction note - what must it contain?
For a correction note to be a valid and formally correct document, it should contain certain elements. The essential elements that must be included on the correction note include:
- Date of issue of the correction note - Each note should be dated clearly to indicate when it was issued.
- Correction note number - Each note should have its own individual number. Numbering can be done in any way, but it must be consistent and allow for document identification.
- Purchaser's data - Full name of the purchaser, address, and Tax Identification Number.
- Seller's data - The seller's full name, address, and Tax Identification Number.
- The number of the invoice to which the correction note relates - The note must indicate the number of the invoice being corrected so that the documents can be unambiguously linked.
- Description of the error - The correction note should specify exactly what is wrong with the invoice and indicate the correct version of the information.
- Signature of the person issuing the note - Although formally, the signature is not required, it is worthwhile that an authorized person sign the correction note for the security of the document and compliance with internal regulations.
