Issue and Apply a Credit Memo

Use a credit memo when a client should owe you less than an invoice you’ve already sent. See Credit Memos for what they are and when to use one.

Create the credit memo

1. Open the client and go to the Credits tab.
2. Click New Credit Memo.
3. Optionally pick the project it relates to. Leave it blank for a credit that covers the client as a whole.
4. Choose a reason, and set the credit date. Give it a credit memo number if your firm uses them.
5. Click Add Line and describe what you’re crediting, with a quantity and amount. Add as many lines as you need; the total is worked out for you.
6. Click Create Credit Memo. It’s saved as a Draft, and you land on its details page.

You can keep editing a draft with Edit Credit Memo.

Issue it

When it’s ready, click Issue Credit at the top of the credit memo. It becomes Open, and its amount shows up in the client’s Available Credit. Use Download PDF if you want to send the client a copy.

Changed your mind before using it? Rescind takes an unused credit back to Draft, and Void cancels it.

Apply it to an invoice

1. On the credit memo, open the Applied to Invoices tab and click Apply to Invoice.
2. Pick the invoice. Only this client’s sent invoices that still have a balance are listed, each showing how much is due. If the credit is for a project, only that project’s invoices are listed.
3. The amount fills in with the most you can apply: whichever is smaller, the credit left or the invoice balance. Lower it if you only want to apply part.
4. Check the Applied On date, then click Apply Credit.

The invoice’s balance drops by that amount, and the credit’s remaining amount drops with it. To apply the rest of the credit to another invoice, repeat these steps.

To undo an application, click the remove icon on its row. The amount goes back onto both the invoice and the credit.

Refund it instead

If the client wants the money back rather than a lower invoice:

1. Open the Refunds tab and click Record Refund.
2. The amount fills in with everything that’s left on the credit. Change it if you’re refunding less.
3. Choose the payment method, set the date, and add a reference such as the check number.
4. Click Record Refund.

To undo a refund, click the remove icon on its row.

Related pages

• Credit Memos
• Create and send an invoice
• Invoices