Credit memos, credits and refunds can be confusing, so we've provided information that will help explain the differences and how to apply them.
Note: If you create a credit memo and want to issue a refund instead or vice versa you will need to delete the transaction and recreate it.
What's the difference between a credit memo, credit and a refund?
A credit memo is a posting transaction which can be applied to a customer's invoice as a payment or reduction.
A delayed credit is a non-posting transaction that you can include later on a customer's invoice.
A refund is a posting transaction which is used when reimbursing a customer money.
This means that:
- Credit memos are used to offset an existing customer balance.
- Delayed Credits can be included only on an invoice.
- Delaeyed Credits don't affect a customer balance until they are included on a saved invoice.
- Refunds are used to show money given back to a customer to refund for services the customer is not happy with, to offset a credit balance, merchandise or service not received, or an overpayment.
Entering a credit memo will affect your customer's balance, but will not affect a customer's invoice until it is manually applied.
- Go to the Plus Sign Icon and click Refund Receipt or Credit Memo. If you don't see
this, click show more.
- Fill out all required fields
- Click Save and new or Save and close .
Applying the Credit Memo to an invoice:
- Go to the Plus Sign Icon and click Receive Payment .
- Complete these fields as follows:
- Customer: From the drop-down list select the customer the credit memo is for.
- Date: Change if necessary.
- Amount:, Pymt Method: and Ref#: fields are to be left blank.
- Memo: (Optional)
- Deposit To: Leave blank since money isn't actually being deposited with this transaction.
- Select the Invoice that you want to apply the Credit Memo against.
- Select the Credit Memo that you are wanting to apply to the invoice
- Verify that the total to pay (if any) is correct after applying the Credit Memo then click Save.
Entering a delayed credit will allow you to apply it as a line item on your customer's next invoice.
- Go to the Plus Sign Icon and click Delayed Credit .
- Complete all fields
- Click Save and new or Save and close.
Applying the Delayed Credit to an invoice:
Go to the Plus Sign Icon and click Invoice.
On the Customer: drop down list and select the desired customer.
Complete fields on invoice.