How to Create a Credit Note on ETIMS (2026 Step-by-Step Guide)

Q: What is a Partial Credit Note on ETIMS?

A Partial Credit Note on ETIMS is used when only part of an invoice needs to be adjusted or refunded. For example, if an invoice was issued for KES 10,000 and goods worth KES 3,000 are returned, a Partial Credit Note may be issued for KES 3,000. ETIMS generally allows one partial credit note per invoice.

Q: Is a Credit Note on ETIMS reversible?

Generally, no. Credit Notes become part of the ETIMS record and must comply with Kenya Revenue Authority requirements. If an error occurs after submission, additional correction procedures or guidance from KRA may be required.

Q: Can I create a Credit Note on ETIMS using my phone?

Yes. ETIMS supports mobile access through supported channels, including mobile browsers and certain mobile services. This allows users to manage ETIMS transactions directly from a phone.

Q: Does a Credit Note cancel an invoice on ETIMS?

Not always. A Full Credit Note may fully reverse an invoice, while a Partial Credit Note only adjusts part of the invoice value.

Q: Can I issue a Credit Note for multiple ETIMS invoices?

Generally, a Credit Note on ETIMS is linked to a single original invoice. If multiple invoices require adjustments, separate Credit Notes may be needed.

Q: What happens if I create the wrong Credit Note on ETIMS?

Creating an incorrect Credit Note may affect business records and tax reporting. Incorrect amounts or adjustments may impact VAT reporting and other tax obligations, potentially requiring corrective action.

How to Create a Credit Note on ETIMS – Simple Guide

May 22, 2026

Estimated read time: 4 minutes

If you use ETIMS for your business in Kenya, sooner or later you may ask yourself:

“How do I create a Credit Note on ETIMS?”

Maybe your customer returned goods.
Maybe you charged the wrong amount.
Or maybe you entered the incorrect invoice details.

If you are wondering How to Create a Credit Note on ETIMS, you are not alone.

Many business owners know how to create invoices on ETIMS but get confused when they need to process refunds or correct mistakes.

The good news?

Learning How to Create a Credit Note on ETIMS is easier than most people think.

In this beginner-friendly guide by Quartet Consulting, you will learn:

What a Credit Note on ETIMS means
When you should create one
Step-by-step instructions on How to Create a Credit Note on ETIMS

So, Let’s get started.

Table of Contents

What is a Credit Note on ETIMS?
What is the Difference Between a Credit Note and a Normal Invoice on ETIMS?
What is the Purpose of a Credit Note on ETIMS?
Who Can Create a Credit Note on ETIMS?
How Do You Create a Credit Note on ETIMS?
Step-by-Step: How to Create a Credit Note on ETIMS
What is the Difference Between a Reverse Invoice and a Credit Note?
What is the Difference Between a Full Credit Note and a Partial Credit Note on ETIMS?
FAQs on How to Create a Credit Note on ETIMS
Conclusion

So... What is a Credit Note on ETIMS?

A Credit Note on ETIMS is a document you create when you need to reduce or reverse an invoice that you had already issued on ETIMS.

Think about it this way.

When you make a sale, you usually create an invoice.

But what happens if something changes afterwards?

For Example:

✓ Your customer returns goods
✓ You accidentally charged too much
✓ Wrong customer information was entered
✓ Some items paid for were not supplied
✓ Goods were damaged and refundedYou usually do not delete the invoice.

Can you simply delete the invoice?

Usually, no.

Instead, ETIMS requires you to create a Credit Note.

A Credit Note tells KRA:

“This transaction has changed, so my business records need to be adjusted.”

In simple terms:

*An Invoice*	Adds income to your business records
*A Credit Note*	Reduces or adjusts income already recorded

You can think of a Credit Note as ETIMS’ way of helping your business keep accurate records whenever a sale changes after the invoice has already been issued.

This helps you stay compliant with KRA requirements and maintain proper tax records for your business.

Confused about whether eTIMS is required for your Tax Compliance Certificate in Kenya?

Quartet Consulting can help you register for eTIMS, ensure compliance, and avoid delays with KRA approvals.

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What is the Difference Between a Credit Note and a Normal Invoice on ETIMS?

This is one area that confuses many business owners when they start using ETIMS.

At first glance, an Invoice and a Credit Note may seem similar because both are documents issued through ETIMS.

Here is a simple comparison table:

Difference	Normal invoice on ETIMS	Credit Note on ETIMS
Definition	A document used to record a sale of goods or services	A document used to reduce, adjust, or reverse an invoice already issued
Purpose	Records income earned by your business	Records refunds, corrections, or returned goods
Effect of revenue	Increases business revenue	Reduces previously recorded revenue
When it is issued	When you sell goods or services	When goods are returned, prices were wrong, or invoice details need correction
Relationship to original sale	Creates the original transaction	Must be linked to an existing ETIMS invoice

Simple Example

Imagine you own a hardware shop.

You sell paint worth KES 20,000.
You issue an ETIMS
Three days later, your customer returns paint worth KES 5,000.

Can you simply delete the invoice?

Instead, ETIMS requires you to create a Credit Note.

Your records would now look like this:

Original Sale → KES 20,000
Less Returned Goods → KES 5,000
Final Revenue → KES 15,000

What Is the Purpose of a Credit Note on ETIMS?

The purpose of a Credit Note on ETIMS is to help you correct a sale after an invoice has already been issued.

Business transactions can change after you have already created an ETIMS invoice.

The scenarios in which you can issue a credit note on ETIMS are as follows:

Scenario	What Happened	How a Credit Note Helps
Goods Returned	Your customer returns some or all goods after purchase	ETIMS adjusts the original invoice amount
Overcharging a customer	You accidentally invoice a higher amount than intended	A Credit Note reverses the extra amount charged
Wrong information entered	Wrong customer name, KRA PIN, VAT category, quantity, or pricing was entered	ETIMS allows you to correct the transaction
Some goods were not supplied	A customer pays for 10 items but only receives 8	A Credit Note adjusts the value of missing goods
Damaged goods returned	Goods supplied are defective or damaged and later returned	ETIMS records the refund or adjustment properly
Wrong tax applied	The wrong VAT treatment or tax category was used	A Credit Note helps correct the tax position
Order cancellation	A customer cancels an order after an invoice was already created	The Credit Note reduces or reverses the sale value

Who Can Create a Credit Note on ETIMS?

You can create a Credit Note if:

✓ Your business is registered on ETIMS
✓ You already issued the original invoice on ETIMS
✓ You have a valid reason for making the adjustment

This commonly applies to:

Companies
Sole proprietors
Partnerships
VAT-registered businesses
Businesses using ETIMS

How Do You Create a Credit Note on ETIMS?

Before creating a Credit Note on ETIMS, make sure you have:

✓ Original invoice number
✓ Reason for adjustment
✓ Full or Partial Credit Note selection
✓ Amount being adjusted or reversed

The good news?

ETIMS automatically links your Credit Note to the original invoice, so you do not need to create everything from scratch.

Step-by-Step: How to Create a Credit Note on ETIMS

Follow these simple steps:

Step	What You Need To Do
Step 1: Log Into ETIMS	Open your ETIMS account using your login credentials.
Step 2: Go to Transaction Management	Navigate to: Transaction Management → Invoice / Sales Receipt
Step 3: Locate the Original Invoice	Find the invoice you want to adjust or reverse.
Step 4: Open the Invoice	Click the invoice number to open the transaction details.
Step 5: Select Credit Note	Click Credit Note (or Cancel Request depending on your ETIMS version).
Step 6: Choose Credit Note Type	Select whether it is a Full Credit Note or a Partial Credit Note.
Step 7: Select the Reason	Choose the reason for adjustment such as: Damaged goods, Wrong information, Missing quantity, Overcharge, or another valid business reason.
Step 8: Save the Information	Review the details and click Save.
Step 9: Generate Credit Note	Click Generate Credit Note to complete the process.

Done.

Your ETIMS Credit Note has now been created successfully.

What is the Difference Between a Reverse Invoice and a Credit Note?

A Credit Note is used when you need to reduce or adjust an invoice already issued on ETIMS, for example where goods are returned, prices were incorrect, or part of a sale changes.
A Reverse Invoice, on the other hand, is commonly used where a buyer creates an ETIMS invoice on behalf of a seller who is not able to generate ETIMS invoices themselves, for example small informal businesses such as a mama mboga. It’s also called a Buyer-Initiated Invoice.

N/B: You can learn more about Reverse Invoicing on ETIMS in Kenya by clicking here

What is the Difference between a Full Credit Note and a Partial Credit Note on ETIMs?

When creating a Credit Note on ETIMS, you usually have two options:

Type of Credit Note	When It Is Used
Full Credit Note	Used when the entire invoice amount needs to be reversed or refunded
Partial Credit Note	Used when only part of the invoice needs to be adjusted

Partial Credit Note Example

You sell 5 cartons worth KES 10,000.
Your customer later returns 2 cartons worth KES 4,000.
You do not reverse the entire invoice.
Instead, you create a Partial Credit Note for KES 4,000.

Important ETIMS Rule

Be careful when creating a Partial Credit Note.
You can generally only create one Partial Credit Note per invoice.
If another adjustment is needed afterwards, ETIMS may require the remaining balance to be reversed instead of creating another Partial Credit Note.
This is why it is important to carefully confirm quantities and refund amounts before generating your Partial Credit Note.

Recommended Articles

If you’re new to ETIMS, you should also read:

● What is ETIMS in Kenya?

● How to create an invoice using ETIMS in Kenya?

● How to register for ETIMS in Kenya?

● Is ETIMS a requirement to get a TCC in Kenya?

FAQs on How to create a Credit Note on ETIMS

1. What is a Partial Credit Note on ETIMS?

Partial Credit Note on ETIMS is used when only part of an invoice needs to be adjusted or refunded.

Example:

If you invoiced KES 10,000 and goods worth KES 3,000 are returned, you can issue a Partial Credit Note for KES 3,000.

Important:

ETIMS generally allows only one Partial Credit Note per invoice.

2. Is a Credit Note on ETIMS reversible?

Generally, No.
Credit Notes become part of your ETIMS records and must comply with KRA requirements.
If a mistake happens after submission, you may need to contact KRA for guidance, which can make the correction process longer

3. Can I create a Credit Note on ETIMS using my phone?

Yes
You can create a Credit Note on ETIMS using supported ETIMS mobile access channels.
You may also access ETIMS through your mobile browser or supported mobile services such as:*222#
This allows you to manage ETIMS transactions directly from your phone.

4. Does a Credit Note cancel an invoice on ETIMS?

Not always.

Whether an invoice is fully cancelled depends on the type of Credit Note issued i.e.

A Full Credit Note may fully reverse an invoice.
A Partial Credit Note only adjusts part of it.

5. Can I issue a Credit Note for multiple ETIMS invoices?

Usually, no.
A Credit Note on ETIMS is generally linked to one original invoice.
If multiple invoices require adjustment, separate Credit Notes may be required.

6. How long do I have to create a Credit Note on ETIMS?

Credit Notes should generally be created within the applicable KRA ETIMS timelines.
To avoid compliance issues, it is advisable to create your Credit Note as soon as a refund, return, or invoice adjustment becomes necessary.

7. What happens if I create the wrong Credit Note on ETIMS?

Creating the wrong Credit Note on ETIMS may affect your business records and tax reporting.
For example, if the Credit Note amount is incorrect, it may create incorrect tax exposure and potentially affect taxes such as VAT

Would you like us to assist you:

Registering for eTIMS and securing your Tax Compliance Certificate in Kenya?

Click the WhatsApp button to book your free consultation with Quartet Consulting now

Or call us at 0736 570 370

Conclusion

Learning How to Create a Credit Note on ETIMS is an important part of managing your business records properly and staying compliant with KRA requirements.

Whether your customer returns goods, you accidentally overcharge, or you need to correct invoice information, ETIMS allows you to properly adjust your records using a Credit Note.

Once you understand How to Create a Credit Note on ETIMS, processing refunds, correcting invoice mistakes, and maintaining accurate ETIMS records becomes much easier.

Most importantly, creating Credit Notes correctly helps your business:

✓ Maintain accurate tax records
✓ Reduce compliance risks
✓ Properly document refunds and adjustments
✓ Keep your ETIMS records clean and organised

Need help with ETIMS compliance in Kenya, ETIMS onboarding, or KRA tax processes?

Quartet Consulting can help.

We are a tax advisory firm located in Nairobi that specialises in ETIMS onboarding and compliance.

Book a free consultation with us today.