How do i create credit notes for CIS products/materials that will account for the CIS originally deducted on the invoice ?

Glad seeing you here in the Community, @christina2008. I'm here to walk you through how to create a credit note for CIS that's deducted from the invoice.

Let's start by taking notes of the CIS amount and deducting it from the existing invoice (see snapshot for reference). This information is required upon entering the credit note into the system.

After that, we now create a credit note and apply it to the invoice. Here are the steps:

1. Select the Plus sign.
2. Under Customers, choose Credit Note.
3. Enter the customer's name.
4. On the first line, fill in the CIS item and the amount.
5. On the second line, fill in the CIS Suffered item and enter the Less CIS amount with a minus sign.
6. Once done, click on Save and close.

You can create a CIS Suffered item if it doesn't appear on the second line:

1. Tick the empty field below Product/Service column on the second line of the credit memo.
2. Select the drop-down arrow and hit Add new.
3. Choose Service.
4. Fill in CIS Suffered as the name.
5. Under Tax, click on No Vat.
6. Select Save and close once done.

Lastly, let's apply the credit memo to the existing invoice. Here's how:

1. Access the existing invoice.
2. Choose Receive payment.
3. Put a checkmark on the invoice and credit memo.
4. Select Save and close.

See this module about keeping track of CIS transactions: How to run CIS reports in QuickBooks Online.

It's always our pleasure to be of help. Feel free to leave a comment below if you need extra help with this matter or QuickBooks in particular. Take extra care!