Credit memo in QuickBooks is used when any customer receives store credit, a refund for service or purchase product. These credits are displayed in the Accounts Receivable record in the Customer Center itself. Credit memos boost the existing customer credit account. When any credit is added in an error you can take steps to cancel or delete the credit memo in order to eradicate the credit available for a customer. Deleting the credit memo decreases the credit available from both the registers. However, the record is attached in the transaction history, in case if it is needed for reference. Hence, a credit memo in QuickBooks helps vendors to keep track of all the sales, payments and return of any item.
How can you create a credit memo in QuickBooks for returned items?
Use the credit memo when your customer returns paid item/product. The credit amount may be credited as a refund in the customer account. This credit amount can be in turn used in clearing the next invoice.
Follow the steps to create a credit memo for your customer:
- Open to Customers menu and click on Create Credit Memos option
- Drop-down the Customer: Job option and pick out the suitable Customer, to whom the credit amount is to be credited
- In the line items region, type in the particular returned item and click on Save > Close
- The Available Credit will be displayed in the Window, select any of the options:
- Retain available credit option: Here QuickBooks will enter a negative sum into the A/R register for a credit memo. This credit can be reused as a payment for other transaction in the future.
- Give refund option: The refund is issued in cash, check, or credit card.
- Apply to invoice option: The Apply Credit is opened to you, select an invoice that the credit is to be applied.
- Once it is done click on OK to end the process.
How can you delete a credit memo in QuickBooks?
If you find that you a credit memo has been applied to an invoice in error. Follow any of the methods instructed below to delete the credit memo:
- Open to credit memo in the existing QuickBooks account.
- Hit the Ctrl + H keys, the history related to the credit memo will be displayed to you.
- Search for the invoice where the incorrect credit was applied and double-click on it
- Now, click on the Apply Credit tab
- From the Previously Applied Credits Window clear the present credit selection
- Click on Done
- Click on Save > Close to delete the selected credit and save the changes made
- Open to Customers menu, drop-down the list, and click on Customer Center
- Click on the Customers and Jobs button
- View the customer list and pick out the customer to whom the credit is provided
- Then, open the credit memo that needs to be deleted
- Click on the Edit menu
- You can either select the Delete Credit Memo or Void Credit Memo option, whichever you prefer
- Once selected click on Confirm
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