How to manage cancelled and corrected invoices
Introduction
An invoice sent with the wrong amount, incorrect VAT or a client who cancels their order after receipt: these situations occur regularly in the day-to-day management of a business. But contrary to what you might think, you cannot simply delete or modify an invoice that has already been issued.
In Switzerland, any invoice sent must be kept in its original version for accounting and tax purposes. The solution? Issue a credit note to cancel or correct the initial document. This approach guarantees complete traceability of your operations and protects you in the event of an audit.
The difference between cancelling and correcting an invoice is not always obvious. Cancellation concerns a transaction that does not take place (cancelled order, invoice issued in error), whilst correction aims to rectify an error on a service actually provided. Each case requires a specific method, particularly for VAT treatment.
This guide explains the practical steps for managing these situations without error: when to cancel or correct, how to issue a compliant credit note, what documentation to keep, and how to maintain consistent numbering in your records.
📌 Summary (TL;DR)
An issued invoice cannot be deleted or modified directly. To cancel it (transaction that does not take place) or correct it (rectify an error), you must issue a credit note that references the original document. This method guarantees accounting traceability and tax compliance.
Depending on the case, you can issue a full credit note followed by a new invoice, or a partial credit note to correct only the error. Complete documentation and sequential numbering are essential for your records and VAT audits.
📚 Table of contents
- Cancelled invoice vs corrected invoice: what's the difference?
- When should you cancel an invoice?
- How to correctly cancel an invoice in Switzerland
- When should you correct an invoice?
- Methods for correcting an invoice
- Special case: correcting a VAT error
- Documentation and traceability: best practices
- How BePaid simplifies correction management
- Checklist: cancel or correct an invoice without error
Cancelled invoice vs corrected invoice: what's the difference?
A cancelled invoice means that the transaction is entirely invalidated. You issue a credit note for 100% of the initial amount. This concerns invoices sent in error, services not performed or duplicates.
A corrected invoice involves a partial modification: price error, incorrect quantity or wrong VAT rate. You can issue a partial credit note or cancel completely and re-invoice.
Both situations require rigorous documentation for accounting and VAT purposes. Consult our complete guide on credit notes for technical details.
When should you cancel an invoice?
You must completely cancel an invoice in these situations:
- Client invoiced in error (wrong recipient)
- Service or delivery ultimately not performed
- Duplicate invoicing
- Completely incorrect amount requiring full re-invoicing
Important: you can never simply delete an invoice that has already been sent. Accounting traceability and VAT obligations prohibit this. In Switzerland, all accounting documents must be kept for 10 years, including cancelled invoices and their corresponding credit notes.
How to correctly cancel an invoice in Switzerland
Cancelling a cancelled invoice follows a precise process in three essential steps. Each step guarantees legal compliance and accounting clarity.
Here's how to proceed in accordance with Swiss standards:
Issue a full credit note
The credit note must reproduce exactly 100% of the amount of the original invoice, including VAT.
Mandatory information:
- Clear reference to the cancelled invoice (number and date)
- Unique number for the credit note
- Negative amount identical to the invoice
- VAT breakdown (same rate as the original invoice)
Send the credit note to the client even if the invoice has not yet been paid. This is an accounting obligation, not just a refund.
Update your accounting records
Record the credit note in your accounts as a negative entry. It reduces your turnover and VAT due for the period concerned.
Impact on VAT return: the amount of the credit note decreases your taxable turnover. If you have already submitted your VAT return including the cancelled invoice, you will need to correct it during the next period.
Always keep the original invoice and credit note together in your archives. These two documents form an inseparable set for tax audits.
Inform the client
Communicate clearly with your client about the cancellation. Explain the situation and next steps.
Message template:
"Following an invoicing error, we are cancelling invoice no. [XXX] dated [date]. Please find attached the corresponding credit note. [If payment made: We will process the refund within 5 working days.] [If new invoice: You will receive the corrected invoice separately.] Thank you for your understanding."
This transparency avoids misunderstandings and maintains a quality professional relationship.
When should you correct an invoice?
A partial correction is appropriate in these situations:
- Quantity error (5 units invoiced instead of 3)
- Incorrect unit price
- Wrong VAT rate (8.1% instead of 3.8%)
- Forgotten discount or reduction
- Address or bank details error
For minor errors that do not invalidate the entire transaction, a targeted VAT correction is simpler than a complete cancellation. You keep the original invoice valid and adjust only the incorrect element.
Methods for correcting an invoice
Two main approaches exist for correcting an invoice that has already been sent. The choice depends on the extent of the error and your preferences regarding traceability.
Each method has its advantages depending on your specific situation.
Method 1: Full credit note + new invoice
This is the clearest method and recommended for significant corrections.
Process: completely cancel the incorrect invoice with a 100% credit note, then issue a new correct invoice with a new sequential number.
Advantages: perfect traceability, accounting simplicity, no ambiguity for the client or auditor.
Disadvantage: generates more documents to archive.
This approach is ideal when several elements are incorrect or for significant amounts. Discover how to manage your invoices efficiently.
Method 2: Partial credit note
For minor corrections, issue a credit note only for the amount of the error.
Concrete example: you invoiced CHF 1,000 instead of CHF 800. Issue a credit note for CHF 200 (plus VAT if applicable). The original invoice remains valid for the balance of CHF 800.
This method works well for quantity adjustments, forgotten discounts or small calculation errors. Always clearly indicate the reference to the original invoice on the partial credit note.
Special case: correcting a VAT error
VAT errors are particularly sensitive as they impact your tax returns.
Example: you applied the standard rate (8.1%) instead of the reduced rate (2.6%) on books. You must correct both the net amount and the VAT.
If the error concerns a VAT return already submitted to the FTA, you must report it and correct it during your next return. Consult our article on VAT declaration methods to understand the impact according to your system.
Documentation and traceability: best practices
Rigorous documentation protects your business during audits and tax inspections. Complete traceability of each correction is a legal obligation in Switzerland.
Here are the essential elements to master for compliant management.
What you must keep
Systematically archive these documents:
- Original invoice (even if cancelled)
- All credit notes issued
- New corrective invoice if applicable
- Correspondence with the client explaining the correction
Legal retention period in Switzerland: 10 years minimum.
Paper and/or electronic format accepted, but documents must remain legible and accessible throughout the period. A clear filing system by client and date facilitates future searches.
Numbering and sequence
Credit notes must follow their own sequential numbering (e.g. CN-001, CN-002) or be integrated into your general invoicing sequence.
Golden rule: no gaps in numbering. Each number must correspond to an existing document, even if cancelled.
The new corrective invoice takes the next number in your normal sequence. For example: invoice F-150 incorrect → credit note CN-025 → new invoice F-151.
This rigour avoids questions during tax audits.
Comments and justifications
Always add an internal comment explaining the reason for the cancellation or correction. This note facilitates understanding during future audits.
Examples of clear wording:
- "Cancellation - client invoiced in duplicate"
- "Correction - incorrect VAT rate (8.1% instead of 2.6%)"
- "Adjustment - quantity modified from 10 to 8 units"
Remain factual and precise. These comments may be requested during a tax audit to justify negative accounting entries.
How BePaid simplifies correction management
BePaid automates the management of cancelled and corrected invoices to save you time and avoid errors.
Key features:
- Creation of credit notes in a few clicks with automatic reference
- Automatic and compliant sequential numbering
- Automatic VAT calculations according to Swiss rates (8.1%, 3.8%, 2.6%)
- Complete history of each invoice and its corrections
- Accounting exports for your fiduciary
The free version allows you to test these features on 10 invoices. Discover our invoicing tools.
Checklist: cancel or correct an invoice without error
Follow this checklist for each correction:
- ☐ Identify whether full cancellation or partial correction is necessary
- ☐ Issue the credit note with all mandatory information
- ☐ Update accounting records and VAT
- ☐ Inform the client in writing with clear explanation
- ☐ Issue a new invoice if necessary
- ☐ Archive all documents together
- ☐ Check the impact on the current VAT return
- ☐ Note the reason for the correction for future reference
This checklist guarantees total compliance and impeccable traceability.
Cancelling or correcting an invoice is not a trivial operation: it engages your accounting and tax responsibility. The distinction is simple: a cancelled invoice disappears completely (via a 100% credit note), whilst a corrected invoice is replaced by a new version after cancellation of the original.
Principles to remember: never modify an invoice that has already been sent, always document your corrections, maintain sequential numbering and clearly inform your client. A VAT error requires particular attention to remain compliant with FTA requirements.
Traceability is your best ally in the event of an audit. Each credit note must reference the original invoice and be accompanied by a clear justification.
With BePaid, you create your compliant invoices and credit notes in a few clicks, with automatic numbering and complete traceability. No more juggling between Excel and your paper documents. Try it free and simplify the management of your corrections.
