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arkvalleyinfo
November 20, 2018
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Applying a credit memo

  • November 20, 2018
  • 3 replies
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Best answer by KhimG

Greetings, @arkvalleyinfo.

 

Thanks for visiting the QuickBooks Community. Allow me to help you apply a credit memo to your customer’s invoice in QuickBooks Online.

 

If a customer paid more than what was owed, returning a product, requesting a refund, or if you’re rewarding them with a store credit, you can create a Credit Memo. Once done, you can apply it to an open invoice for a given customer. 

 

Here’s how to create a credit memo in QBO:

  1. Click the Plus (+) icon and select Credit Memo.
  2. Choose the customer name.
  3. Enter the Credit Memo Date.
  4. Fill in the necessary information.
  5. Click Save and close.

However, if you have already created a credit memo, you can proceed in applying it to the invoice. Follow the steps below on how:

  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.

The steps above will help you apply the credit to your customer’s open invoices. For your reference, you may check out this article: Apply a credit memo, credit or refund to a customer.

 

Please let me know if you have questions. I’ll be here to help. Wishing you the best!

3 replies

K
KhimGAnswer
November 20, 2018

Greetings, @arkvalleyinfo.

 

Thanks for visiting the QuickBooks Community. Allow me to help you apply a credit memo to your customer’s invoice in QuickBooks Online.

 

If a customer paid more than what was owed, returning a product, requesting a refund, or if you’re rewarding them with a store credit, you can create a Credit Memo. Once done, you can apply it to an open invoice for a given customer. 

 

Here’s how to create a credit memo in QBO:

  1. Click the Plus (+) icon and select Credit Memo.
  2. Choose the customer name.
  3. Enter the Credit Memo Date.
  4. Fill in the necessary information.
  5. Click Save and close.

However, if you have already created a credit memo, you can proceed in applying it to the invoice. Follow the steps below on how:

  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.

The steps above will help you apply the credit to your customer’s open invoices. For your reference, you may check out this article: Apply a credit memo, credit or refund to a customer.

 

Please let me know if you have questions. I’ll be here to help. Wishing you the best!

    T
    tifftucker
    January 24, 2019

    I'm having difficulty applying a credit memo to a specific invoice. I have followed the steps you listed above, but it shows that the customer actually paid the remaining balance after the credit was applied instead of leaving that as an open balance on the invoice. When I follow the steps and save and close, it shows a zero balance on that invoice instead of the remaining balance after the credit was deducted. Any insight you can give would be much appreciated!

      A
      Alessandra_B
      January 24, 2019

      It's nice seeing you here in the Community, @tifftucker.

       

      Since your concern is different from the one mentioned above, you need to delete the payment made for the invoice and recreate it. This way, you can correctly apply the credit memo to the invoice and show the correct balance. 

       

      Here's how you can delete the payment:

      1. Open the invoice.
      2. On the upper right corner, under the amount, click on 1 payment made.
      3. Click on the date on the pop-up.
      4. Click More on the bottom of the payment, and choose Delete.
      5. Choose Yes on the pop-up.

      Once done, we need to recreate the payment. Please follow these steps:

      1. Open the invoice.
      2. Click on Receive Payment.
      3. On the Amount Received box, change it to 0.
      4. Tick the invoice and credit memo.
      5. On the Payment Column for the invoice, change it to the amount of the credit memo.
      6. Click on Save and Close.

      You can read this article for more information: Apply a credit memo, credit or refund to a customer.

       

      Please let us know in the comment section below if you have other questions.

        M
        Malinda1
        March 17, 2020

        After I applied the credit memo to the invoice, the credit memo still shows up on the A/R Report. How do I get it off of there?

        S
        ShiellaGraceA
        March 17, 2020

        Hello @Malinda1,

         

        We're unable to remove the credit memo in the report. All account receivables transactions that are settled or not will always display in the A/R report.

        This will track transactions related to customers.

         

        You can read this article for more information about understanding accounts receivable. I'm also adding our page about reports and accounting for future reference.

         

        Should you need help with anything else, please let me know. I'd be around to help. Thanks and have a great day.

        M
        mking716
        May 16, 2023

        Customer ordered product online and paid by credit card.  The order was placed through Shopify who got the credit card information and processed the charge.  The payment was put through on our shopify deposit.  Just after ordering the product, the customer cancelled the order.  On the same shopify deposit, the credit was deducted from the payout.

         

        The invoice was voided in QBO.  I have a payment that is sitting as a credit on the account, and I have a refund on the account.  I would like to apply the refund to the payment, but cannot do so.

         

        Any suggestions?

        Angelyn_T
        Angelyn_T
        May 16, 2023

        Glad to have you here today, King. I'll show you how to apply the refund transaction to the payment amount sitting as a credit on your account.

         

        As an initial step, you need to open the refund transaction and update the account under Category to Accounts Receivable to close the pending or unapplied payment.

         

        1. Sign in to your account.
        2. Click on Sales on the left pane.
        3. Tap on the Customer menu.
        4. Select the name, then go to the Transaction List.
        5. Locate the refund entry, then update the account to Accounts Receivable.
        6. Hit on Save and Close.

         

        After that, use the Receive Payment feature to link the two transactions.

         

        1. Go to the +New icon.
        2. Click on Receive Payment.
        3. Choose the refund entry and the available credits under the Outstanding Transactions and Credits sections.
        4. Click on Save and Close.

         

        For more hints while handling customer refunds and payments, you can open these articles:

         

         

        Aside from that, you can get more tips while working with your sales and other customer transactions in the future: Topics about your company's income and customers.

         

        If you have follow-up questions while applying the refund and the payment entries, let me know by leaving a comment below. I'm more than happy to help you again. Keep safe!

         

        If you have follow-up questions while applying the refund and the payment entries, let me know by leaving a comment below. I'm more than happy to help you again. Keep safe!

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