Allocating Credit Notes

Article Contents

1. Introduction
2. Using the Credit/Reissue Page
3. Using the Allocate Credit Note Tool
4. Allocating Credit Notes in Xero

Introduction

Hiro provides flexible tools to manage credit notes, depending on your scenario:

• Use the Credit/Reissue Invoice page when cancelling an invoice, with the option to generate a replacement. It automatically allocates the credit note in full to the original invoice.

• The Allocate Credit Note tool allows you to apply a credit note — in full or partially — to any outstanding invoices of your choosing.

• If you’re using Xero, credits allocated there will sync across to Hiro automatically.

Using the Credit/Reissue Page

The Credit/Reissue page is designed for reversing an invoice — either to cancel it entirely, or to cancel and immediately reissue the charges on a new invoice.

It’s handy when you simply need to change the billing entity while keeping all other details the same, or when writing off an invoice as a bad debt.

To access: go to Financial > Credit/Reissue Invoice.

You'll be prompted to:

1. Search for the original invoice.

2. Choose whether to:

   • Credit only – issue a credit note that cancels the invoice, or

   • Credit and reissue – cancel the invoice and generate a new one that copies all the original line items, including quantities, rates, and descriptions.

3. Set the issue/revenue/allocation date (these align to a single selected date).

   🔄 If you're reissuing, the new invoice will use this same date for consistency — however, the due date will remain the same as the original invoice.
   For example, if the original invoice is already overdue, the reissued invoice will also be overdue. This prevents clients from gaining extra days to pay by switching billing entities.

4. (Optional) Adjust the Xero account for either the credit note or reissue invoice:

   • Xero account – credit note
     This is useful when writing off the invoice to an expense account, such as Bad Debts.
     Selecting a new account here replaces all original account allocations on the credit note. If the original invoice had multiple line items posted to different accounts, all of them will be overwritten with the single selected account.

   • Xero account – reissue invoice
     Allows you to post the replacement invoice to a different account in Xero. Like the credit note, selecting a new account will replace all line-by-line account assignments.

   The default for both fields is “Keep same as original invoice”, which preserves all original account coding.

5. (Optional) Select a different billing entity for the reissued invoice.

Once saved:

• Hiro creates a credit note to cancel the original invoice

• The credit note is automatically allocated in full to that invoice

• If selected, a new invoice is generated using the same line items and due date as the original

✅ Best suited for:

• Reissuing to a different billing entity

• Writing off an unpaid invoice

• Reversing an invoice without needing partial allocations or line-by-line edits

Using the Allocate Credit Note Tool

In Hiro, credit notes are simply invoices with negative totals — they’re created and managed in the same section as standard invoices. Unlike Xero, there’s no separate “Credit Notes” menu — you'll find them listed alongside all other invoices in Financial > Invoices.

This tool gives you full control over how and where a credit note is applied. Use it when:

• You want to apply a credit note to multiple invoices

• You need to perform a partial allocation

• You aren’t reissuing anything — just redistributing the credit value

To use this method:

• Either create a new credit note or open an existing credit note in Financial > Invoices (look for an invoice with a negative total).

• Click Save (or re-save) to trigger the Allocate Credit Note popup.

• Enter the amounts to apply to one or more outstanding invoices.

• Confirm the allocation.

💡 Any unallocated balance remains available for future use.

This tool is available regardless of whether the credit note was created via the Credit/Reissue Invoice page, imported from Xero, or entered directly.

Allocating Credit Notes in Xero

If you are using Xero for your accounting integration, credits applied in Xero automatically carry over to Hiro:

1. Ensure Your Hiro Account is Connected to Xero
   Before applying credits, make sure your Hiro account is properly connected to Xero. This ensures data synchronisation between the two systems. Learn more about connecting Hiro to Xero in this article.

2. Allocate Credit Notes in Xero

   • In Xero, go to the Business menu and select Invoices.

   • Click on the Awaiting Payment tab. to find any outstanding invoices.

   • Locate and open the credit transaction. Use the search function if you know the contact's name or the credit amount.

   • In the top right–hand corner of the credit transaction, click Credit Note Options, then select Allocate Credit.

   • Enter the amount to credit next to the relevant invoice, then click Allocate Credit to confirm.

3. Review Allocation in Hiro
   Within moments, any changes to credit allocations made in Xero will automatically sync with Hiro. As long as the relevant invoice and credit note numbers match between the two systems, the credit note will be applied in Hiro.