Quickbooks Credit Memo: How to Create & Apply It

Last Updated on October 1, 2020 by Editorial Staff

We often think of QuickBooks as being there to help us get paid by our customers. After all, it has specially made invoice templates for customer billing and sales receipts for instant sales recording. It even supports payments online, allowing you to accept debit or credit cards as well as electronic checks. It makes the process of recording payments simple and it gives you reports that allow you to keep track of everything. So here we have a blog for you regarding, ‘QuickBooks Credit Memo’. If you want to know deeply about this then, stay with us.

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QuickBooks allows you to create credit memos or issue a refund check in simple steps. Now start the article:

QuickBooks Credit Memo

Credit memo is for a customer who returns an item that they have already paid for. It is to credit the customer for the cost of the two procedures, this is more complicated. It takes more bookkeeping because you need to track the sale, the payment, and the return of the item.

If a customer paid more than what was owed, returning a product, requesting a refund, or if you are rewarding them with a store credit then, you can create a Credit Memo. Let’s have a look, How to create and apply a credit memo in QuickBooks.

How to Create & Apply QuickBooks Credit Memo

To create and apply QuickBooks credit memo, you need to follow the below given two steps carefully. Let’s start the procedure:

Steps to Create Credit Memo in QuickBooks

QuickBooks credit memo can be created in a simple procedure, and here we have given the procedure to do it:

  • Firstly, go and click on the option of + New.
  • Then, click on a Credit memo or Give credit option.
  • After that, you can enter the customer’s name, and then fill out the required fields that are given below:
    • Date
    • Products or service items
    • Quantity
    • Amount
  • And at the last, click on Save and close option.

Steps to Apply the Credit Memo to an Invoice

After creating a credit memo in QuickBooks, its time to apply the credit memo to an invoice, and follow the procedure to perform it. Here we have provided two steps to apply the credit memo:

Manually Apply a Credit Memo

Here’s we can show that the steps to how to manually apply a credit memo to an invoice. This process gives you control over which open invoice you can apply a credit memo to.

  • First, you need to click on the + New option.
  • After that, choose the option of either Receive payment or Receive invoice payment.
  • Then, enter the customer’s name option, and then fill out the required fields:-
    Note: you can make sure that select the same customer or project you selected in the invoice.
    • Date
    • Memo (optional)
  • Leave the fields Payment method, Reference no, Deposit to, and Amount received blank.
  • Click on the option of the credit memo from Step 1 in the Credits section.
  • Then, you can enter how much credit your customer wants to use in the Payments column.
  • If you need any then important to make sure the total to pay is correct after applying the credit memo.
  • And at the last, click on the Save and close option.

Automatically Apply Credit Memos to Invoices

Here’s we can show the steps on how to automatically apply credit memos. This lets QuickBooks use credit memos as payments for newly created or open invoices.

  • In this process first, you need to go to the Settings option, and then click on the option of Account and Settings.
  • Choose the option Advanced tab, and then click on the option of Edit in the Automation section.
  • After that, click on the option of Automatically apply for credits.
  • And finally, at the last, click on the option of Save, then Done.

How to Find Credit Memos in QuickBooks

If in case, you need to find credit memos in QuickBooks then, you can follow the below steps:

  • Open QuickBooks and choose Customers and Receive from the report tab
  • Select transaction list by Customer from the new drown down list to start it further
  • Click on customize the report and then move to the filters tab
  • Type the transaction in the choose filter search area
  • Click on the transaction type when the drop-down opens and select credit memo
  • Click OK to see all credit memos that you have in QuickBooks desktop

If you have the list of all credit memos then, you can settle an overpaid invoice in any of the four ways stated below:-

  • Create a credit and return the amount which is overpaid
  • Write off the amount by creating a Journal Entry
  • Put the credit to the next invoice
  • Put the credit to another invoice, which is not paid

Conclusion:

As mentioned above the QuickBooks credit memo you can use QuickBooks credit memo as the payment for different types of transactions. It is important for all types of transactions and also keeps track of all records in QuickBooks. We hope, you like it, and now you are able to create and apply the credit memo in QuickBooks. Further if in case, you need any help then, you can get the QuickBooks ProAdvisor support through the toll-free number +1-888-461-1179 .

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Quickbooks Credit Memo: How To Create It