Partially apply Customer Credit to Invoices

Hi lynnphtr1,

Properly recording your transactions ensures accuracy across your books. Thanks to its awesome features, QuickBooks Online makes your invoicing process smooth and easy. I'll be happy to show you how to apply a fraction of your customer credit to an invoice and keep track of the remaining balance.  

Before applying your customer credit to an invoice, you first need to create it. Here's how.

1. Select + New then Credit memo.
2. Enter the customer’s name, then fill out the required fields: Date, Products/service items, Quantity, Amount.
3. Select Save and close.

And voila!

When manually applying a customer credit to an invoice, you have the flexibility to edit the total amount of the credit displayed under the Payment section. This allows you to easily apply the customer credit partially. Because this procedure has to be done manually, you'll have to ensure that the feature Automatically apply credits is turned off. 

1. Go to Settings ⚙, then Account and Settings.
2. Choose the Advanced tab, then click on Edit ✎ in the Automation section.
3. Turn off Automatically apply credits.
4. Select Save, then Done.

Now that you have your customer credit created and the feature Automatically apply credits off, you can now proceed to partially apply the credit.

1. Select +New then Receive payment.
2. Enter the customer’s name, then fill out the required fields: Date, Memo (optional)
3. Select your Invoice in the Outstanding Transactions section.
4. In the Credits section, select the credit memo you previously created. Then, in the Payments column, enter how much credit your customer wants to use.
5. Make sure the total to pay (if any) is correct after applying the credit memo.
6. Select Save and close.

To then view and track the remaining credit balance, simply go to Sales > Customers > Select your customer > Locate your credit memo > View the balance under the Balance column. 

I hope this was helpful! For more on how to handle customer credits, check out this article: Create and apply credit memos or delayed credits in QuickBooks Online

Have a great day.