# Auto-apply credit notes

## Overview

The **Auto-Apply Credit Notes** setting determines whether available credit notes under a billing owner’s account should be automatically applied to invoices when auto-pay is enabled on a booking. When enabled, this feature helps streamline billing by using any available credits before charging the customer's default payment method.

### Setup the auto-apply rule

The auto-apply rule can be configured at the booking level, it defaults to enabled.

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#### When Enabled

* Credit notes belonging to the **billing owner** are automatically applied **to the first invoice** or **to recurring invoices** of the booking at the time of auto-payment.
* If the credit notes do not cover the full invoice amount, the **remaining balance** will be charged to the default payment method.
* Ensures minimal manual intervention in applying credits.

#### When Disabled

* No credit notes are applied automatically.
* The **full invoice amount** will be charged to the default payment method when auto-pay is triggered.
* Credit notes can still be applied manually if needed.


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