Transfer a credit from one customer to another in QuickBooks Online

To transfer the credit from one customer to another, you must first create a journal entry and then apply the credit.

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Create a journal entry

If you need help with journal entries, you can work with QuickBooks Live Experts and feel more confident. Find out more about QuickBooks Live Bookkeeping.

First, you'll need to follow these steps to create a journal entry for the transfer:

1. Select + New.
2. Select Journal Entry.
3. Enter the date in Journal date.
4. On the first line item, select Accounts Receivable (A/R) from the Account dropdown list.
5. In the Debits field, enter the amount being transferred.
6. In the Memo field, note the reason of the journal entry.
7. From the Name dropdown list, select the name of the customer the credit is being transferred from.
8. On the second line item, select Accounts Receivable (A/R) from the Account dropdown list. The credit amount and the memo auto populates.
9. From the Name dropdown list, select the name of the customer the credit is being transferred to.
10. Select Save.

Apply the credit

Next, you'll apply the credit by following these steps:

1. Select + New.
2. Under Customers, choose Receive Payment.
3. Select the name of the customer the credit was transferred from.
4. Under Outstanding transactions, check the journal entry you created.
5. Under Credits, check the credit memo you need to transfer.
6. Select Save and close. (Note: This removes the credit from the customer you are transferring the money from.)
7. Select + New.
8. Under Customers, choose Receive Payment.
9. Select the name of the customer the credit was transferred to.
10. Under Outstanding Transactions, select the invoice you want to apply the credit to.
11. Under Credits, find and check the journal entry you created.
12. In the Payment column, enter how much of that credit you want to apply.
13. Select Save and close.