diff --git a/erpnext/accounts/doctype/purchase_invoice/purchase_invoice.json b/erpnext/accounts/doctype/purchase_invoice/purchase_invoice.json
index 15468575cdd..95e1ccf132b 100755
--- a/erpnext/accounts/doctype/purchase_invoice/purchase_invoice.json
+++ b/erpnext/accounts/doctype/purchase_invoice/purchase_invoice.json
@@ -2787,7 +2787,7 @@
    "label": "Status", 
    "length": 0, 
    "no_copy": 0, 
-   "options": "\nDraft\nSubmitted\nPaid\nUnpaid\nOverdue\nCancelled", 
+   "options": "\nDraft\nReturn\nDebit Note Issued\nSubmitted\nPaid\nUnpaid\nOverdue\nCancelled", 
    "permlevel": 0, 
    "precision": "", 
    "print_hide": 0, 
@@ -3293,7 +3293,7 @@
  "istable": 0, 
  "max_attachments": 0, 
  "menu_index": 0, 
- "modified": "2016-11-08 11:49:00.752417", 
+ "modified": "2016-11-09 14:18:47.094777", 
  "modified_by": "Administrator", 
  "module": "Accounts", 
  "name": "Purchase Invoice", 
diff --git a/erpnext/accounts/doctype/purchase_invoice/purchase_invoice_list.js b/erpnext/accounts/doctype/purchase_invoice/purchase_invoice_list.js
index afcd61f228e..8283acc4f12 100644
--- a/erpnext/accounts/doctype/purchase_invoice/purchase_invoice_list.js
+++ b/erpnext/accounts/doctype/purchase_invoice/purchase_invoice_list.js
@@ -14,7 +14,9 @@ frappe.listview_settings['Purchase Invoice'] = {
 			} else {
 				return [__("Unpaid"), "orange", "outstanding_amount,>,0|due,>=,Today"];
 			}
-		} else if(flt(doc.outstanding_amount)==0 && doc.docstatus==1) {
+		} else if(flt(doc.outstanding_amount) < 0 && doc.docstatus == 1) {
+			return [__("Debit Note Issued"), "darkgrey", "outstanding_amount,<,0"]
+		}else if(flt(doc.outstanding_amount)==0 && doc.docstatus==1) {
 			return [__("Paid"), "green", "outstanding_amount,=,0"];
 		}
 	}
diff --git a/erpnext/accounts/doctype/sales_invoice/sales_invoice.json b/erpnext/accounts/doctype/sales_invoice/sales_invoice.json
index b4747cecd58..216b73ac7ff 100644
--- a/erpnext/accounts/doctype/sales_invoice/sales_invoice.json
+++ b/erpnext/accounts/doctype/sales_invoice/sales_invoice.json
@@ -3081,7 +3081,7 @@
    "label": "Status", 
    "length": 0, 
    "no_copy": 1, 
-   "options": "\nDraft\nSubmitted\nPaid\nUnpaid\nOverdue\nCancelled", 
+   "options": "\nDraft\nReturn\nCredit Note Issued\nSubmitted\nPaid\nUnpaid\nOverdue\nCancelled", 
    "permlevel": 0, 
    "precision": "", 
    "print_hide": 1, 
@@ -4039,7 +4039,7 @@
  "istable": 0, 
  "max_attachments": 0, 
  "menu_index": 0, 
- "modified": "2016-11-08 11:47:43.494612", 
+ "modified": "2016-11-09 14:18:24.760263", 
  "modified_by": "Administrator", 
  "module": "Accounts", 
  "name": "Sales Invoice", 
diff --git a/erpnext/accounts/doctype/sales_invoice/sales_invoice_list.js b/erpnext/accounts/doctype/sales_invoice/sales_invoice_list.js
index 5e21d7abefe..3c9c4b428da 100644
--- a/erpnext/accounts/doctype/sales_invoice/sales_invoice_list.js
+++ b/erpnext/accounts/doctype/sales_invoice/sales_invoice_list.js
@@ -10,7 +10,9 @@ frappe.listview_settings['Sales Invoice'] = {
 			return [__("Return"), "darkgrey", "is_return,=,Yes"];
 		} else if(flt(doc.outstanding_amount)==0) {
 			return [__("Paid"), "green", "outstanding_amount,=,0"]
-		} else if (flt(doc.outstanding_amount) > 0 && doc.due_date >= frappe.datetime.get_today()) {
+		} else if(flt(doc.outstanding_amount) < 0) {
+			return [__("Credit Note Issued"), "darkgrey", "outstanding_amount,<,0"]
+		}else if (flt(doc.outstanding_amount) > 0 && doc.due_date >= frappe.datetime.get_today()) {
 			return [__("Unpaid"), "orange", "outstanding_amount,>,0|due_date,>,Today"]
 		} else if (flt(doc.outstanding_amount) > 0 && doc.due_date < frappe.datetime.get_today()) {
 			return [__("Overdue"), "red", "outstanding_amount,>,0|due_date,<=,Today"]
diff --git a/erpnext/controllers/status_updater.py b/erpnext/controllers/status_updater.py
index cb783b4db34..fcddc8fb3df 100644
--- a/erpnext/controllers/status_updater.py
+++ b/erpnext/controllers/status_updater.py
@@ -44,7 +44,9 @@ status_map = {
 	"Sales Invoice": [
 		["Draft", None],
 		["Submitted", "eval:self.docstatus==1"],
-		["Paid", "eval:self.outstanding_amount==0 and self.docstatus==1"],
+		["Return", "eval:self.is_return==1 and self.docstatus==1"],
+		["Credit Note Issued", "eval:self.outstanding_amount < 0 and self.docstatus==1"],
+		["Paid", "eval:self.outstanding_amount==0 and self.docstatus==1 and self.is_return==0"],
 		["Unpaid", "eval:self.outstanding_amount > 0 and getdate(self.due_date) >= getdate(nowdate()) and self.docstatus==1"],
 		["Overdue", "eval:self.outstanding_amount > 0 and getdate(self.due_date) < getdate(nowdate()) and self.docstatus==1"],
 		["Cancelled", "eval:self.docstatus==2"],
@@ -52,7 +54,9 @@ status_map = {
 	"Purchase Invoice": [
 		["Draft", None],
 		["Submitted", "eval:self.docstatus==1"],
-		["Paid", "eval:self.outstanding_amount==0 and self.docstatus==1"],
+		["Return", "eval:self.is_return==1 and self.docstatus==1"],
+		["Debit Note Issued", "eval:self.outstanding_amount < 0 and self.docstatus==1"],
+		["Paid", "eval:self.outstanding_amount==0 and self.docstatus==1 and self.is_return==0"],
 		["Unpaid", "eval:self.outstanding_amount > 0 and getdate(self.due_date) >= getdate(nowdate()) and self.docstatus==1"],
 		["Overdue", "eval:self.outstanding_amount > 0 and getdate(self.due_date) < getdate(nowdate()) and self.docstatus==1"],
 		["Cancelled", "eval:self.docstatus==2"],
diff --git a/erpnext/patches/v7_1/update_invoice_status.py b/erpnext/patches/v7_1/update_invoice_status.py
index 5a2d013f318..851af80f7a2 100644
--- a/erpnext/patches/v7_1/update_invoice_status.py
+++ b/erpnext/patches/v7_1/update_invoice_status.py
@@ -12,9 +12,11 @@ def execute():
 		update 
 			`tabPurchase Invoice` 
 		set 
-			status = (Case When outstanding_amount = 0 and docstatus = 1 then 'Paid'
+			status = (Case When outstanding_amount = 0 and docstatus = 1 and is_return = 0 then 'Paid'
 			when due_date < CURDATE() and outstanding_amount > 0 and docstatus =1 then 'Overdue'
 			when due_date >= CURDATE() and outstanding_amount > 0 and docstatus =1 then 'Unpaid'
+			when outstanding_amount < 0 and docstatus =1 then 'Debit Note Issued'
+			when is_return = 1 and docstatus =1 then 'Return'
 			when docstatus = 2 then 'Cancelled'
 			else 'Draft'
 		End)""")
@@ -22,9 +24,11 @@ def execute():
 	frappe.db.sql(""" 
 		update 
 			`tabSales Invoice` 
-		set status = (Case When outstanding_amount = 0 and docstatus = 1 then 'Paid'
+		set status = (Case When outstanding_amount = 0 and docstatus = 1 and is_return = 0 then 'Paid'
 			when due_date < CURDATE() and outstanding_amount > 0 and docstatus =1 then 'Overdue'
 			when due_date >= CURDATE() and outstanding_amount > 0 and docstatus =1 then 'Unpaid'
+			when outstanding_amount < 0 and docstatus =1 then 'Credit Note Issued'
+			when is_return = 1 and docstatus =1 then 'Return'
 			when docstatus = 2 then 'Cancelled'
 			else 'Draft'
 		End)""")
\ No newline at end of file