The purpose of creating a Credit Memo Invoice is to create a Credit for a client or vendor that you keep on file until its to be used to pay for future invoices. However, you can use a manually created credit memo invoice for a variety of reasons, such as trying to reduce the AR of an open invoice.
Here are some similar features you may want to explore before following these guides steps are:
Credit Memos are created similarly to a regular invoice, but with a negative amount in the line.
You can also create Credit Memos on the AP side as well using Vendor Invoices. This is if you have a Credit on file with a vendor that you want to track on your side.
NOTE: NEVER create a credit memo with the Advance Billing box checked. To create a credit memo for an advance billing invoice, please refer the Advance Bill Invoices guide.
Adding A Credit Memo
Menu > Billing > Today Billing > Invoice
1) Enter the appropriate information in the header information. The Posting Date is very important. This is the date the system will recognize the reduction in AR against that invoice.
2) In the Details area, enter the desired negative total amount. Ex. -100
3) In the description area, enter details regarding the reason for the credit.
Connect Credit To Outstanding Invoice(s)
5) From the Credit Memo>Applications: Invoices Applied> click on the blue 0.00
6) Select the appropriate client invoice that you want to credit.
7) Click Add Selected. This will bring you to the applied invoices screen. NOTE: You can adjust the Applied Amount for each selected invoice to apply specific amounts to each invoice.
8) Click the X icon in top right corner to go back to main invoice screen
The total amount applied will now be visible under Applications: Invoices Applied
9) Approve and Post the invoice.
View The Posting Detail
From the main invoice window there are two places to access the posting detail:
1) Header>POSTING DETAILS, or
In either case, this will bring you to the following Posting Details screen:
You can confirm the GL accounts that are affected by the account, -Debit AR and -Credit Revenue. The reduction of revenue will be seen in the project. The connected revenue invoice(s) will show a reduction of AR associated with the applied amount from the credit memo.