What is a Debit Note: Guide for Singapore Businesses

Invoice adjustments and pricing discrepancies are unavoidable in business. There may be situations where your business has to handle issues of underbilling or additional charges and it is important to have a proper system in place to correct these issues.

In such cases, a debit note allows you to notify a buyer of an increase in the amount payable, serving as an official adjustment to an invoice. This allows both parties to keep track of outstanding amounts and ensure accountability in business transactions.

In this article, we’ll explore what a debit note is, how Singapore businesses use them and how to issue one. You’ll also discover how Wise Business can help you manage business payments more efficiently - especially if you frequently have cross-border transactions.

Table of contents
What is a debit note and when is it issued? What information should you include in your debit note? How to request a debit note if you are a buyer How to issue a debit note as a supplier Debit note vs Invoice: are they the same thing? Debit note vs Credit note Wise Business makes expense management easier

What is a debit note?

A debit note, which may also be referred to as a “debit memo”, is a document issued to notify a buyer that they owe money to the seller.

This could be due to underbilling, additional charges or returned credit notes.

When is a debit note issued?

A common use of debit notes is when the original invoice contains errors.

For example, if your customer raised an invoice for 45 units of goods instead of the 50 units of goods delivered, you will need to issue a debit note to account for the sale of the 5 units that were not included in the original invoice.

There may be cases where a buyer issues the debit note as well. For example, if your buyer received 45 units of goods instead of 50 units as billed for in the original invoice. A buyer may also issue a debit note in the case of damaged units of goods. This also applies to any discrepancies in services delivered.

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What information should you include in your debit note?

Like a credit note, your debit note should be formatted clearly.

According to IRAS¹, you should only issue a debit note to request payments where no GST is charged. You should issue a tax invoice if GST is to be charged to enable your customer to support their input tax claims.

That said, if your debit note is issued to collect due credits from suppliers, your debit note should include the same details as a credit note.

Here are the details that should be included in your debit note:

• Header text indicating “Debit Note”
• An identification or serial number
• Date of Issue
• Your company’s details (Name, address, contact details, GST registration number if applicable)
• Your customer’s details (Name, address, contact details, GST registration number if applicable)
• Original invoice number and date of issue
• Description and value of the original goods or services that is being adjusted
• Reason for the debit
• Total amount debited, excluding taxes
• Rate and Total amount of tax debited
• Total amount debited, including taxes

If there are subsequent credit notes received from your customer, the figures should match your debit notes.

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How to request a debit note if you are a buyer

As a buyer, you may need to request a debit note in cases where you have to return damaged goods, deal with incorrect deliverable quantities or when there’s been a billing error in the original invoice.

Clear communication is key in business. Therefore, before requesting an official debit note, you should first contact the seller to discuss the problem and any price adjustment to ensure that you are on the same page.

Once communication has been established, here’s a simple procedure to request a debit note as a buyer:

Review the original invoice: Check the original invoice and verify that there is a discrepancy to be addressed.

Outline the problem: The reason for the debit should be clearly stated so that there are no misunderstandings between both parties. Common issues include incorrect quantities delivered, damaged goods, returned goods, or discrepancies in services delivered.

Calculate and state the adjustment value: Calculate the adjustment value based on the original invoice.

Create the Debit Note: If you are using accounting or invoicing software, you may have the function to create a debit note based on details from the original invoice. Otherwise, refer to the information on the original invoice to create a debit note. If you do not have an existing template, you may change the header and details of your invoice template.

💡 Pro Tip: You could also use Wise Business’s Free Invoice Generator Tool to generate an invoice which you can modify to issue your debit note.

Remember to include important information like the reason for the debit note, the adjusted value in your debit note and reference the original invoice where necessary.

Issue the Debit Note

Depending on your company’s policies, you may need to submit and issue the debit note with the approval of your management or through your finance department. Keep a copy of the debit note for accounting purposes.

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How to issue a debit note as a supplier

As a supplier, there may be times when an incorrect amount is billed for in the original invoice, or when a buyer increases their quantity after the invoice has been issued. When facing such issues, you would need to issue a debit note to collect any outstanding amount.

Remember, clear communication is key. Receiving an unexpected debit note can be an unpleasant surprise, so it would be best to communicate with your customer and explain the issue beforehand.

Here’s how you should issue a debit note as a supplier thereafter:

Review the original invoice: Check the original invoice and verify that there is a discrepancy to be addressed. You should also take note of key information like the invoice number, date and other transaction details.

Outline the problem: The reason for the debit should be clearly stated so that there are no misunderstandings between both parties. Common issues include incorrect billing in invoices or changes to the final quantity of goods or services delivered.

Calculate and state the adjustment value: Calculate the adjustment value based on the original invoice.

Create the Debit Note: You can create the debit note using your accounting or invoice software, or using a template. Remember to include key information like the reason for the debit note as well as the adjustment value. If you do not have an existing template, you may change the header and details of your invoice template. You could also use Wise’s Free Invoice Generator Tool to generate an invoice which you can modify to issue your debit note.

Issue the Debit Note: Depending on your company’s policies, you may need to issue a debit note through your finance department. Remember to keep a copy of the debit note along with the original invoice to account for changes in the amount payable.

💡 Using a business account like Wise Business that links up to popular accounting software like Xero or Quickbooks helps to make sure that clear records are consolidated when payments are received or when refunds are made. ➡️Learn more about Wise Business integrations

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Debit note vs Invoice: are they the same thing?

While a debit note and an invoice are similar in that they both indicate the amount owed to the seller, they serve different purposes.

A debit note is a document to notify the customer of a debt or outstanding amount owed concerning an existing invoice. On the other hand, an invoice indicates the information of a sale and serves as a bill or a request for payment from the customer.

Issuing invoices allows you to collect payment from customers however, creating invoices manually can be a time-consuming process especially if your business handles a large volume of transactions frequently.

Using free tools like Wise Business’s invoice generator tool can help you save a significant amount of time. Having a Wise Business account allows you to create and send invoices directly from your account, enabling your business to get paid even faster.

Debit note vs Credit note

Both debit notes and credit notes are used to adjust or write off debts in a transaction, allowing both the seller and buyer to acknowledge changes made to the original invoice and help maintain accurate records of the final transaction.

While they are often confused, debit notes and credit notes represent opposite directions of cash flow in a transaction—debit notes indicate an increase in the amount payable by the buyer, while credit notes reduce the amount owed to the seller.

When an invoice is undercharged, the seller will issue a debit note to increase the amount owed.

Conversely, if the buyer is overcharged (or if goods are returned), the seller issues a credit note to reduce the amount owed.

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Wise Business makes expense management easier

A debit note is a document used by a seller to notify their buyer of outstanding payments on top of an existing invoice. It gives you the flexibility to update your buyer of changes to payment instead of having to reissue a full invoice which could take a whole billing cycle to clear.

On the other hand, as a buyer, debit notes allow you to notify your seller of changes to the original invoice due to damaged or returned goods, or when there is a billing error in the invoice received.

Receiving a debit note can be an additional and sometimes unexpected expense in your books. Having a reliable system to manage such expenses helps you stay on top of your company’s expenses and cash flow.

💡 If you are struggling to get a clear view of your company expenses, using Wise Business for your business account could help. On top of low fees on international financial transactions, your business can also benefit from a myriad of tools that help better manage your expenses. For example, you can manage all your currencies and track your transactions from a single account, with detailed reporting. Wise Business also integrates with popular accounting software, allowing you to keep track of your expenses and cash flow automatically.

Get Started with Wise Business today

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Sources:

1. IRAS on “Invoicing Customers”

Sources checked on 10th March 2025