How to Enter a Credit Memo in QuickBooks

  • google plus

In Brief...

Customers occasionally will purchase items or services they need to return. If a customer returns items or if an error was made when billing a client, you can issue a credit memo to adjust the customer's open balance. Credit memos have the opposite effect of invoices and create a negative balance on the account. You can automatically apply credit memos to open invoices. A pop-up message notifies you if the customer has an unpaid balance. When you enter a credit memo for a customer with an unpaid invoice, you can apply it to the unpaid invoice, retain it as a credit on the account, or issue a refund (this option generates a check payable to the customer). To enter a credit memo for a customer in QuickBooks, follow these seven steps.

This feature works the same in versions 2011–2016 of QuickBooks.

Instructions

  1. On the Home page, in the Customers panel, click Refunds & Credits.

  2. From the Customer:Job drop-down list, select the customer.
    Select Customer

  3. Fill out the Credit Memo form, entering the date, credit memo number (you can assign it or accept QuickBooks' automatic numbering), quantity, item, and item details as applicable.

  4. Mark the To be printed or To be e-mailed checkbox(es) or neither to indicate how the credit memo should be distributed to the customer.

  5. Verify the total amount of the credit memo and then click Save & Close.

  6. If the customer has a remaining balance, you are prompted to select how to apply it. Select an option and then click OK.
    Available Credit Notice

  7. Confirm that the credit memo was entered correctly by viewing the customer transaction history or by viewing the Open Balance Report.
    Customer Center
    Open Balance Report

Author: Lee Fifield

Lee is a writer, editor, and technology evangelist. Lee received her undergraduate degree in Communications from Ithaca College.

Discuss