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.
- On the Home page, in the Customers panel, click Refunds & Credits.
- From the Customer:Job drop-down list, select the customer.
- 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.
- 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.
- Verify the total amount of the credit memo and then click Save & Close.
- If the customer has a remaining balance, you are prompted to select how to apply it. Select an option and then click OK.
- Confirm that the credit memo was entered correctly by viewing the customer transaction history or by viewing the Open Balance Report.