Document background
The Credit Note Policy is essential for organizations operating in South Africa to maintain proper control over credit note issuance and management. This document becomes necessary when businesses need to establish standardized procedures for handling price adjustments, returns, refunds, and corrections to invoices, ensuring compliance with South African tax laws, particularly VAT requirements. The policy addresses the growing complexity of business transactions and the need for clear internal controls, while meeting the strict requirements of the South African Revenue Service (SARS). It provides guidance on when and how to issue credit notes, approval hierarchies, and record-keeping requirements, helping organizations maintain accurate financial records and minimize risks associated with incorrect credit note handling.
