What Is a Negative Invoice and When Should You Use One

A negative invoice is a billing document with a negative balance used to reverse a previous charge, process a customer refund, or apply a discount after the original invoice was issued. It decreases the total amount a customer owes—or returns money to them if the credit exceeds their outstanding balance. Finance teams use negative invoices instead of deleting original invoices because they preserve the audit trail that accountants and auditors expect.