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I have a customer that overpaid on a previous invoice. Rather than return they asked me to apply it to a future invoice. I am using QuickBooks Online and I do not see an option to apply credits to an invoice which will reduce the balance the client owes on the invoice.
For example: balance owing of $75.00 but client has a previous credit memo of $37.50. I would like to reduce the balance left on the invoice by using credit. They would only owe $37.50 instead of the original $75
Thank you for reaching out to the Community space, @heartformusic. I appreciate your inquiry and am here to assist you with the process of applying a credit memo to your customer's invoice in QuickBooks Online.
If a customer has made an overpayment, returned a product, requested a refund, or if you wish to provide them with store credit as a reward, you have the option to create a Credit Memo in QuickBooks Online. Once you have generated the credit memo, you can then apply it to an outstanding invoice associated with that particular customer.
In your case, because your customer has overpaid their invoice, you won't need to manually create a credit memo. The excess amount from the overpayment will automatically generate a credit for your customer, which can be applied to future invoices.
Here’s how to apply credits to your customer's invoice:
The steps above will help you apply the credit to your customer’s open invoices. For your reference, you may check out this article: Apply a credit memo, credit or refund to a customer.
If you have other concerns about credit memos, invoices and other QuickBooks-related tasks, let me know by leaving a reply below. The Community is always here to help 24/7.
@heartformusic One thing that @GenmarieM neglected to mention is that when you send your customer the invoice, even with the credit applied, it will still show the $75 balance.
Try sending a statement, instead. It will show the credit is being applied to the invoice and will reduce the total due to where it should be.
Thanks for the suggestion. One of the other things I read was that there was an option under "automation" to apply credit note directly to the invoice. Will this do what I want it to?
It's nice to have you back, heart. I'm excited to discuss the possibility of automating the application of credits to your invoices. This feature can significantly streamline your billing process, saving you time and effort while ensuring accuracy in your financial records.
Yes, you have the option to enable the auto-apply credits feature. Once done, you'll need to save the invoice, the credit memo, or the transactions beforehand. This step allows the system to match the credits and apply it to your customers' balances or open invoices. After that, you can send the updated information to your customers.
I'll show you how you can enable this feature:
Additionally, when you turn on auto-apply credits, here's what'll happen:
You can refer to this article to learn more: Create and apply credit memos or delayed credits in QuickBooks Online.
Finally, when credits are applied automatically to open balances or invoices, it won't specifically indicate that the exact credit has been used. Instead, it'll appear as a payment towards your invoice, and the transaction's status will be marked as Partially paid. I'll include a screenshot for your reference.
PDF view:
In QBO:
If you have any further questions or need more information regarding the management of customer payments, please feel free to comment below, heart. Navigating the complexities of payment processing can sometimes be challenging, and I'm here to help you throughout this process.
This client does have an older open invoice as I get paid the following month after submitting the invoice. I am hoping to apply the invoice to the next invoice which will be August/September services. I will try the various suggestions made here.
Even when auto applying credits, it still won't show up on the invoice that is sent to the customer.
The statement will always show that, where the invoice will only show the FULL amount of the invoice, no applied credit.
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