Issue credit or refunds for an invoice with revenue recognition in QuickBooks Online

Learn how to issue credit memos or refunds for products or services scheduled for revenue recognition in QuickBooks Online Advanced.

You can close or adjust an existing schedule and then issue a credit memo or a refund receipt. For example, let’s say you’ve already recognized CA $ 200.00 for the service, but you want to issue a complete refund for CA $ 1200.00.

Prerequisites

Before you can issue a credit memo, you’ll need at least one existing invoice that’s been issued on a revenue recognition schedule.

Alter the revenue recognition schedule to account for a refund or credit memo

1. Go to Sales and select Invoices (Take me there).
2. Open an existing invoice.
   Tip: You can select View/Edit under Action column to open the invoice.
3. Select the View Revenue Recognition link for the service item.
4. In the Revenue Recognition panel, select Edit.
5. Decide whether to stop all future revenue recognition entries for the item, keep the schedule as-is, or change it.
   Note: If you want to stop all future charges, you need to post an amount to the entry equal to the rest of the total price of the item. For example, if you’ve already recognized CA $ 200.00 for the service out of a total of CA $1200.00, you need to post CA $ 1,000, and then verify all future entries on the schedule equal CA $ 0. 
6. Select Apply.

Post requisites

After you’ve altered the revenue recognition schedule, you can create and issue a credit memo or a refund receipt‌. Any refund or credit memo reverses the recorded income for the account by an equal amount.

Related links

• Understand revenue recognition in QuickBooks Online
• Set up a product or service’s revenue recognition schedule in QuickBooks Online
• Change a revenue recognition schedule in QuickBooks Online
• Create and apply credit memos or delayed credits in QuickBooks Online