Credit notes

I understand your frustration. I am an accountant and work all day on Quickbooks and it took me a while to get my head around QBO's workflow in this regard.

First, it's possible. Just a bit convoluted initially, but once you get a hang of it, it takes just an extra step than it should.

I am typing this off the top of my mind so let me know if any questions.

1) Go to + New button and select 'expense'

2) Select the supplier

3)On right, it should show you list of all open invoices and credit notes.

4) First select the invoice you want to apply the credit note to.

5) Then select the credit note.

6) The expense amount should be £0 as credit note amount should cancel out the invoice amount. 

7) Save

We can imagine how you feel, and hard it is for you to navigate to QuickBooks since you're new to it, @Mexi. We're here now. We'll make sure to assist you and ensure you'll get to apply credit notes in QuickBooks Online (QBO). Also, thank you for posting your concern in the Community. It's our pleasure to help you.

Firstly, we'd like to acknowledge the information shared by @mohsinmkg23. Thank you for that. We appreciate you sharing your knowledge about QuickBooks.

On the other hand, let me share additional information and another way to apply credit notes in QBO. That way, it will reduce the balance of your customers on their next invoice. If you've created a Credit note and are ready to apply it to an invoice. Feel free to see the steps below:

1. Click on the + New button and select Receive payment.
2. Choose the customer.
3. In the Outstanding Transactions section, click the open invoice you want to apply the credit note to.
4. Choose the credit notes you want to apply in the Credits section.
5. Enter the amount of the credit you want to apply for the open invoice in the Payment column.
6. Leave the Payment method, Reference no, Deposit to, and Amount received fields blank.
7. Fill out the rest of the form, including the Payment date.
8. After applying the credit note, make sure the total is correct. Then click Save and Close.

Additionally, if you want to apply credit notes automatically in QuickBooks, please check this article for guidance: Create and Apply credit notes or delayed credits in QuickBooks Online. It also includes further details on handling credits.

Furthermore, we'll be including some links that can guide you in managing customer and supplier refunds and other information that can be helpful in the future:

• Record a customer refund or supplier refund in QuickBooks Online
• Void or delete transactions in QuickBooks Online
• Create and send customer statements in QuickBooks Online

Please don't hesitate to post a reply if the shared information helps you with managing credit notes and if you need further assistance in navigating QuickBooks Online, @Mexi. We're always here for you. Stay safe always! 

@GebelAlainaM you seem to have misunderstood my issue.  I am not invoicing customers, I am the receiver of invoices and on occasion need to apply a partial credit received FROM a supplier.  This credit usually applies to an particular invoice but not always. We have a supplier for example who invoices us once or twice a day for food deliveries.  I pay them monthly by direct debit. I therefore need to reconcile the payment correctly which requires credit notes to be taken into account. I have already chosen in settings to apply credits automatically. As I said in my post this seems to have no effect.

I am glad you recognise that your product is hard to navigate, it does not seem intuitive at all for very basic book keeping functions like credits and remittances.