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Did a customer overpay their invoice? Learn how to handle overpayments and double payments.

A customer credit is money that you owe to a customer.

To process a customer credit for times when a customer returns an item or cancels their order, you first need to record a credit transaction and then record the settlement of the credit as a refund or by applying it to another outstanding invoice.

Recording credits for returns or cancellations

You can create a customer credit note in the following ways:

  • Reverse an existing sale. Use this method if the customer has paid for the entire invoice and wants to cancel the sale.
  • Manually create a credit. Use this method if you are crediting the customer for part of a sale (for example, you need to refund a deposit).

These options are described below.
 

To reverse a sale
  1. Check that the Transactions CAN’T be Changed; They Must Be Reversed option is selected in the Setup menu > Preferences window > Security tab
  2. Find and open the invoice you want to reverse.
  3. In the Sales window, go to the Edit menu and choose Reverse Sale. A credit note transaction is created and the invoice amount is displayed as a negative amount.
    You can make some changes to the credit note (such as changing the date and memo), but you can't change the accounts, amounts and quantities that are associated with the credit.
  4. Click Record Reversal. A customer credit appears in the Sales Register window, and you can then choose to settle the credit by applying it to another sale or refunding it.
To manually create a credit for a service, professional, miscellaneous or time billing sale

Use this method to credit the customer for part of a service, professional, miscellaneous or time billing sale.

Do you have an account for tracking sales returns and allowances?

If you're manually creating a credit note for the first time, check that you have an income account for tracking sales returns and allowances.

  1. Go to the Sales command centre and click Enter Sales. The Sales window appears.
  2. Enter the customer details.
  3. Select Invoice from the list in the top left corner of the window.
  4. Click Layout, choose Service and click OK.
  5. In the Description column, enter a description of the credit for your records.
  6. In the Account column, select the account to be credited. This is the income account you use to track sales returns and allowances.
  7. In the Amount field, type the amount of the credit as a negative amount.
     
  8. Click Record . A credit appears in the Sales Register  window, and you can then choose to settle the credit by applying it to another sale or refunding it.
To manually create a credit for an item sale

Use this method to credit the customer when they return only some of the items in a sale.

  1. Go to the Sales command centre and click Enter Sales. The Sales window appears.
  2. Enter the customer details.
  3. Select Invoice from the list in the top left corner of the window.
  4. Click Layout and choose Item, then click OK.
  5. In the Ship column, type the number of items being returned as a negative number.
  6. In the Item Number field, enter the item number. The costs of the items appear as negative amounts in the Total column.
  7. Click Record. A customer credit appears in the Sales Register window, and you can then choose to settle the credit by applying it to another sale or refunding it.

  FAQs


Why can't I print a customer credit?

If you're unable to print a customer credit, check the following:

  • If the credit was created using the Miscellaneous invoice type it can't be printed.
  • Ensure you have the correct Invoice type selected in the Print Invoices window.
  • Under Advanced Filters, make sure you have the Invoice Status set to Credit or All Invoices/All Sales.
  • If the credit has already been printed, deselect the option Unprinted Invoices Only.
  • Ensure dates entered into the Invoices Dated From .. and To.. fields cover the correct date range for the credit.
  • If the option Invoice Numbers Between is selected, ensure the number range is correct.
How do I delete a customer credit?

To delete a customer credit:

  1. Go to the Sales command centre and click Sales Register.
  2. Click the Returns and Credits tab.
  3. Locate the credit to be deleted.
  4. If the credit was created from a negative sale:
    1. Click the zoom arrow next to the credit to open the transaction.
    2. Go to the Edit menu and choose Delete Sale. The credit will be deleted.
  5. If the credit was created due to an overpayment:
    1. Click the zoom arrow next to the credit to open the transaction.
    2. Click the History button.
    3. Locate the overpayment transaction and click its zoom arrow to open it.
    4. Go to the Edit menu and choose Delete Payment
Why can't I see any outstanding invoices when applying a customer credit?

If you are using categories, you'll need to make sure your customer credit has the same category allocated as your outstanding invoice. This ensures outstanding invoices will display when applying the credit.

Can I add additional credit to an existing customer credit?

No. An existing customer credit can't be increased in value. Instead, you would need to create a new credit for the customer. This is done by creating a $0 sale, and receiving the amount against the sale as an overpayment.