Debit Note
A commercial document issued by a buyer to a seller requesting a reduction in the amount owed on an invoice.
What is Debit Note?
A debit note (or debit memo) is a formal document raised by the buyer to notify the seller that the buyer's accounts payable has been reduced — typically because goods were returned, were received in a damaged condition, or the original invoice contained an overcharge. From the buyer's perspective, issuing a debit note reduces the amount they owe; from the seller's perspective, receiving a debit note triggers the issuance of a credit note to formalize the adjustment. Debit notes are important for maintaining accurate accounts payable records, supporting reconciliation, and providing an audit trail for any adjustments made to original purchase transactions.
Example
A manufacturer receives a $20,000 delivery of raw materials but finds that $3,000 worth of goods are defective. The manufacturer raises a debit note to the supplier for $3,000, reducing the accounts payable balance from $20,000 to $17,000. The supplier then issues a matching credit note and arranges a replacement or refund.
Source: Investopedia — Debit Memorandum