How to issue a credit memo to a Customer for an expensed Products/Services? The credit will be applied later as a payment to an invoice.

there is no way to link a vendor and a customer in QB, so that poses an issue.

1. Pay the bill from your vendor using a cash type bank account, that lowers the cash balance.

2. Create a service type item called marketing and link it to the cash type bank account. Use that item on a customer credit memo. Later apply the credit memo to the customer invoice. Linking it to the cash bank account is unusual but what it does is create a deposit equal to the amount paid on the vendor bill resetting the cash balance to its original amount.

Thank you for your reply! I didn't want to use a bank account but have no choice. The process I'm going to use is similar to what you recommend. The difference is I'm going to use a trust account as a clearing account which will give me better visibility to ensure all credits are recognized properly.

1. Create a credit memo using the correct Products & Services which is linked to the trust account Barter – Customer Credit.

         Barter – Customer Credit   $1,000

               Accounts Receivable (A/R)   -$1,000

2. JE to recognize the credit as an expense.

         Samples          $1,000

               Barter – Customer Credit     -$1,000

3. Apply the credit memo to an invoice.