When you have a lot of products and customers, you will find customers who wants to return your product, or you realize that you want to give a discount/more discount, or you overcharge in the previous invoice.
How do you handle this type of transactions in QuickBooks? You can issue a credit memo to either reduce customer’s outstanding balance or used it againts future invoice, or you can issue a cash/cheque refund to them.

Creating Credit Memos

Let’s follow the steps below:

 

  1. On the Home page, go to Customers > Create Credit Memos/Refunds, you will then see a new "Create Credit Memos/Refunds" window below.

    QB Credit Memo 1


  2. Fill in Customer:Job field, Class if you use one, line Item, and other fields required to produce a credit memo. In the example, all required fields are populated to yield a credit memo of $3.96,- of Adhesive:Electrical Tape to a customer, Jason Cioran.
    QuickBooks populates Jason Cioran Summary and Recent Transactions on the right pane.

  3. By default, QuickBooks checks the “To be printed” checkbox. Unclick if you don’t want to print it. Click the “to be emailed” checkbox if you want to email it.

  4. Click “Save & Close” when you are done.

 

Once you Save and Close the window, a new “Available Credit” window will pop up:

 

QB Credit Memo 2

 

You have 3 ( three) choices to how you are going to apply a credit memo you just created:

  1. Retain as an available credit. Select this option if you want to to retain/keep the credit within your customer balance and apply it to the future invoice.  This credit will show as a "Credit Memo" in your customer transactions list.

  2. Give a refund. Select this option if you want to give a refund to your customer.
    A new "Issue a Refund" window will appear. Fill in appropriate “Issue this refund via” and “Account” fields. You can refund the credit via cheque or cash.
    Unchecked the “To be printed” checkbox as necessary.
    Click OK once you are done.

    QB Credit Memo 3 Refund



  3. Apply to an invoice. Select this option if you want to apply to the current invoice, a new “Apply Credit to Invoices” window will appear. QuickBooks automatically apply the credit memo to the oldest invoice as shown.  If you want to apply it to other invoice, checkmark the other invoice instead.  Click done once you are done.

    QB Credit Memo 4