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debi8
April 29, 2020
Question

Applying a Credit Memo

  • April 29, 2020
  • 1 reply
  • 0 views

I created a credit memo and I want to use it to clear the balance of an invoice.  I go to Receive Payment, enter the customer and then select both of the items, the credit and the invoice which has an open balance due equal to the amount of the credit ($340).  The "Amount Received" is not zero, which I think it should be because the credit cancels the debit.  It shows $340 as the amount received.  When I save this, I now have a new payment of $340 which is closed, and my invoice is paid in full.  However, my credit memo is still showing as unapplied.  If instead I zero out the amount received, then I get a message stating that the transaction will create an additional credit of $340.  I'm so lost at this point.  All I want to do is use the credit to close the balance due on the invoice.  Why is this so hard?

    1 reply

    Pabz_L
    Pabz_L
    April 30, 2020

    Hello, @debi8.

     

    If a customer paid you more than what was owed, returning a product, requesting a refund you can create a Credit Memo. Once done, you can apply it to an open invoice for a given customer. 

     

    Since you’ve already received the payment from your customer, what you can do is delete the payment that you received so you can apply the credit memo to the invoice.

     

    Here’s how.

    1. Go to the Sales menu.
    2. Select Customer.
    3. Find the customer that you wanted to apply for the credit memo.
    4. Click the Payment of the customer.
    5. On the Receive Payment window, click More.
    6. Then, select Delete.

     

    Please refer to the screenshots below.

     

     

    Once done, apply your credit memo to the invoice.

     

    1. Click Sales from the left pane.
    2. Select Customers and click the customer’s name.
    3. Locate the invoice you want to apply the credit to and click Receive Payment.
    4. Enter the necessary information on the Receive Payment window.
    5. In the Outstanding Transactions section, make sure that the correct invoice is selected.
    6. Click Save and close.

     

    For your reference you may check out this article about credit memo, credit, or refund. Enter and apply credit memos and delayed credits in QuickBooks Online.

     

    Please let me know if you have any questions. I’ll be here to help. Take care and keep safe.

      D
      debi8Author
      August 5, 2020

      Once again I am having an issue in QBO trying to apply an open credit memo to a partially paid invoice.  Wen I go to "Receive Payment" and select both the invoice and the credit memo, the "Amount Received" is not zero even though the credit offsets the balance due on the invoice.  If I save it this way, the invoice shows as paid, but the credit memo shows as unapplied.  What are the correct steps to apply a credit memo to a partially paid invoice?

        Jen_D
        Jen_D
        August 5, 2020

        Glad you're back, @debi8,

         

        Regardless if the sale is fully or partly paid, the steps are similar when it comes to applying a refund. If you're recording the payments manually, I've listed the step-by-step process on how to apply a credit to a partially paid invoice below:

         

        Step 1: Create the invoice.

         

        1. Go to the + New button and choose Invoice.
        2. Fill in all the information of the sale and click Save.
        3. On the transaction, click Receive payment.
        4. Record the first partial payment by adding the exact amount received in the Payment field. If it shows the full invoice amount, edit it.
        5. Hit Save and close once the first payment is received.

        Step 2: Create the Credit memo.

         

        1. From the + New icon, choose Credit memo.
        2. Enter the customer name to be refunded.
        3. In the Product/Service column, pick the item being refunded.
        4. Add the correct amount you are going to refund the customer before clicking Save and close.

        Step 3: Apply the credit to close the invoice.

         

        1. Go back to the + New button and choose Receive payment.
        2. In the Customer field, choose the same client name the refund goes to.
        3. The result must show the remaining balance of this customer together with the credit memo.
        4. Mark the correct invoice number and the credit so the Amount received field shows 0.00.
        5. Once done, press Save and close.

        You can also use the steps outlined in this article as your reference: Create and apply credit memos or delayed credits in QuickBooks Online

         

        If the same behavior happens after following the steps, try logging in to a different browser or private window. Let's check if the problem is brought about by issues in the browser and its cache.

         

        To launch a private window, try out these keyboard shortcuts:

         

        Google Chrome: press Ctrl + Shift + N  
        Mozilla Firefox: press Ctrl + Shift + P
        Safari: press Command + Shift + N

         

        Clearing the cache can also help resolve unexpected issues in QuickBooks Online.

         

        Let me know how it goes or if you are using a different method of recording the payment. I'll be right here if you need further help with this topic or need anything else in QuickBooks. Have a nice day!

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