When an invoice has already been sent and something changes — the client was overcharged, returned part of the order, or cancelled a service — you cannot simply erase the original without breaking your records. A credit note is the correct instrument: it formally reduces the balance while leaving the original invoice intact.
Because the reduction is recorded as a separate, dated document, both the invoice and its correction remain visible. This is what keeps the books auditable: anyone reviewing the account can see exactly what was billed and what was credited, and when.
Credit notes also matter for tax. Where VAT was charged on the original invoice, the credit note adjusts the VAT accordingly, which is why issuing one is preferable to quietly editing or deleting the invoice.