What a debit note is — and when to use one instead of a new invoice
A debit note increases what is owed on a transaction that has already been invoiced. It is the mirror image of a credit note: where a credit note reduces a balance, a debit note raises it. You reach for one when the original invoice was too low — goods were under-invoiced, a price was corrected upward, or an extra charge (freight, handling) needs to be added after the fact.
In Kenya a debit note can flow in either direction. A supplier issues one to a customer to add a charge left off the invoice. A buyer issues one to a supplier to formally raise a claim — for goods returned or short-supplied against what they were billed. Whoever issues it, the debit note references the original invoice, so both sets of books move in step.
If VAT is involved, the debit note adjusts the VAT on the original supply, just as a credit note does in the opposite direction. For VAT-registered businesses that means referencing the original invoice and, under KRA’s eTIMS, issuing it electronically. Don’t simply re-issue a bigger invoice — a debit note keeps the original intact and documents exactly what changed and why.
What a proper debit note includes
- ◆Your business name, contacts and KRA PIN, clearly marked “Debit note”
- ◆A debit note number and the date
- ◆The original invoice number it is issued against
- ◆The other party’s name
- ◆The item or charge being added, with quantity and value
- ◆The VAT adjustment (16% if applicable) and the total debited
- ◆The reason — under-invoicing, an additional charge, a price correction
Common mistakes to avoid
- ✕Not referencing the original invoice, so the adjustment floats free of any transaction
- ✕Re-issuing a larger invoice instead of raising a debit note, which double-counts the sale
- ✕Forgetting the VAT adjustment, understating your output tax
- ✕Confusing it with a credit note — a debit note raises the balance, it doesn’t reduce it
Questions
What’s the difference between a debit note and a credit note?
A debit note increases the amount owed; a credit note reduces it. Use a debit note when an invoice was too low (under-invoiced goods, an added charge); use a credit note when it was too high (returns, overcharge, discount). Both reference the original invoice.
Who issues a debit note — the buyer or the seller?
Either. A seller issues one to add a charge left off the invoice; a buyer issues one to a supplier to formally raise a claim (for returns or short delivery). The direction depends on who is correcting what.
Does a debit note affect VAT?
Yes, for VAT-registered businesses. It adjusts the VAT on the original supply upward, so it must reference the original invoice and, under eTIMS, be issued electronically — the same discipline as a credit note.
Can I just send a new invoice for the extra amount instead?
You can raise a separate invoice for a genuinely new supply. But to correct an existing invoice, a debit note is cleaner: it ties the adjustment to the original and avoids double-counting the sale in your books.
When would a buyer issue a debit note?
When a buyer wants to formally reduce what they’ll pay a supplier — for goods returned or short-delivered against the invoice — they raise a debit note to the supplier, who typically responds with a matching credit note. It documents the claim.
The debit note generator is free to build and preview. Downloading a clean PDF without the small watermark is KES 100 in Kenya — a one-off, valid for a few hours so you can make several — and free everywhere else. No account needed; your business details are saved on your own device.