WHMCS 9 credit notes: are we mixing up customer balance adjustments with accounting credit notes?

[whoppe2001]

I've started testing WHMCS 9 and are trying to understand the new credit functionality.

One thing that stands out is that WHMCS now appears to create a credit note when existing customer credit is applied to pay an invoice.

Example:

A customer has an overpaid balance available as credit.

They renew a service priced at 24 EUR excluding VAT. WHMCS adds 25% VAT, making the invoice total 30 EUR.

WHMCS then applies EUR from the customer’s credit balance, closes the invoice, and creates a credit note for 30 EUR (with no VAT)

The net effect is my revenue is now  negative 6 EUR (since I've now credited 30 EUR).

From an accounting/VAT perspective, this is difficult to reconcile.

The invoice represents 24 EUR revenue and 6 EUR VAT. Applying customer credit should normally be a settlement of that invoice, similar to applying a payment. It should not, by itself, create what appears to be an accounting credit note.

In many VAT/GST jurisdictions, invoices and credit notes are formal accounting/tax documents. A credit note normally corrects or reverses an invoice; it is not just a record that customer credit was consumed.

So I am wondering whether WHMCS is intentionally treating this as a formal credit note, or whether the system is using “credit note” terminology for what is really an internal balance movement.

If it is the latter, I think this could create confusion and potentially accounting issues for businesses operating in jurisdictions where issued invoices and credit notes have specific VAT/legal meaning.