Debit note

Meaning

A debit note (إشعار مدين) is issued when an invoice already sent turns out to charge too little: a price agreed upwards after invoicing, a quantity under-billed, a charge omitted. Like the credit note it must name the original invoice and the reason, and it carries full tax-invoice content with VAT on the additional amount. The seller's output VAT and the buyer's input VAT rise in the period the note is issued.

Two other uses of the phrase confuse people. A buyer sometimes sends a "debit note" to a supplier to say it is reducing what it will pay, for short delivery or damage; that is a request, and the VAT document is still the supplier's credit note. And in bookkeeping, "debit" is simply the left side of an entry.

Also called: debit memo · إشعار مدين

Example

Al Noor invoiced two training days at 1,500.00 each but the contract said 1,800.00. It issues debit note DN-2026-0002 against INV-2026-0001 for 600.00 plus 90.00 VAT, reason "price per contract". The customer books the extra 690.00 payable.