Credit memo doesn't show up on transaction list after overpayment

Maverick2 · ‎February 24, 2022

This is strange behavior by quickbooks. A customer overpaid an invoice by $20.80.

I choose to leave the credit to be used later. QB tells me a credit memo will be created. Which it does... BUT

The credit memo doesn't show up on the customer transaction list. But it DOES exist.

There it is.... It's there, but it makes for confusion when working out what's going on if there are complicated transactions going on.

Why does QB behave like this?

BigRedConsulting · ‎February 24, 2022

@Maverick2 RE: I choose to leave the credit to be used later. QB tells me a credit memo will be created. Which it does... BUT

It doesn't tell you a credit memo transaction will be created. It says a credit will remain on the customers account. These are not the same thing.

The "Credit Memo" button the the message creates a printout showing the over-payment, but it's not really printing a credit memo transaction. (It's a button label only a product manager could love, and not anyone familiar with actual accounting.)

The credit referred to is the unapplied/open balance on the over-payment received. Since there is nothing else to apply the over-payment to, the customer will have a credit / negative balance after recording the payment.

Adding an actual credit memo transaction in this case would cause the customer to have even more of a negative balance.

View solution in original post

BigRedConsulting · ‎February 24, 2022

@Maverick2 RE: I choose to leave the credit to be used later. QB tells me a credit memo will be created. Which it does... BUT

It doesn't tell you a credit memo transaction will be created. It says a credit will remain on the customers account. These are not the same thing.

The "Credit Memo" button the the message creates a printout showing the over-payment, but it's not really printing a credit memo transaction. (It's a button label only a product manager could love, and not anyone familiar with actual accounting.)

The credit referred to is the unapplied/open balance on the over-payment received. Since there is nothing else to apply the over-payment to, the customer will have a credit / negative balance after recording the payment.

Adding an actual credit memo transaction in this case would cause the customer to have even more of a negative balance.

Maverick2 · ‎February 24, 2022

Ah, ok thanks for that. I get it. That's very helpful.

We have international sales that sometimes get convoluted for a variety of reasons - single payments that include the balance for one invoice and a deposit for another, backorders realized after they already paid for the full invoice amount, etc.

I use a variation of a customer advance payment recording method that will show a credit memo in the list, which is better for clarity between accounting and sales.

I make a sales receipt for the payment and charge it to a Customer Advance item that's linked to an Other Current Liability account.
I then create credit memos and use the same Customer Advance item - one credit memo for the actual amount of the invoice, and another for the overpayment.
I can then easily see there's credit we can use. Sometimes we use it for other invoices, but sometimes they overpay to cover the fee that our bank charges to receive the wire. I create another invoice using a wire fee item then apply the credit to that.

That way gets me the results, but it seems overly complicated to me. I would love to hear if you have a better way.

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Credit memo doesn't show up on transaction list after overpayment