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Community Contributor *

Apply credit memo from one job to multiple invoices under more than one other job.

I use the Desktop Pro 2018 version, but the question I'm about to pose has been an issue in Quickbooks for all 10 YEARS I've used it.  It suits our small business to assign all invoices, credits, vendor invoices, etc., to a JOB #.  Sometimes there are situations where a job is previously billed and paid, and a credit situation arises.  The customer wants me to apply their credit for the "old" job, which is already paid in full, to a recent invoice.  WHY, WHY, WHY won't Quickbooks allow this?  Why does it not like when I want to apply a credit memo related to
Acme job #2222 against an invoice for Acme job #3333?  There are completely valid reasons to do this for our business model, and I don't understand why Quickbooks won't allow it.  I've had to use dumb work-arounds in order for my business to accommodate the theoretical accounting practices of Quickbooks.   Can you please fix your software?

6 Comments
BRC
Established Community Backer ***

Re: Apply credit memo from one job to multiple invoices under more than one other job.

Why not record the credit memo for job #3333 in this case as that is where the customer asked you to apply the credit?

 

Moderator

Re: Apply credit memo from one job to multiple invoices under more than one other job.

Good to see you here in the Community, Cheryl2do.

I can lend a helping hand with applying a credit memo from Acme job #2222 to Acme job #3333 via QuickBooks Desktop.

 

To apply the credit memo to the job #333, make sure that the credit memo is retain as an available credit.

 

Here's how:

 

  1. From the Customers menu, select Create Credit Memos/Refunds.
  2. From the Customer: Job drop-down, select the appropriate Customer.
  3. Enter the returned items in the line item area, then select Save & Close.
  4. On the Available Credit window, choose one of the following:
    • Retain as an available credit - QuickBooks enters a negative amount in your A/R register for the credit memo. You can use this credit as payment for another transaction.
    • Give a refund - You can issue the refund as cash, a check, or a credit card refund.
    • Apply to an invoice - QuickBooks opens the Apply Credit to Invoices window where you can select an invoice to which you want to apply for this credit.
  5. Select OK.

 

After that, you can apply the credit memo to an invoice.

 

Here's how:

 

  1. Click Customers at the top menu bar and choose Receive Payments.
  2. Choose the Job #3333.
  3. Select an invoice.
  4. Click Discounts And Credits.
  5. Select the Credits to apply in the invoice.
  6. Hit Done.
  7. Click Save & Close.

 

 

 

You can get more details in this article: Record a credit memo or refund in QuickBooks Desktop.

 

That's it! Let me know how it goes by leaving a reply below. I'll stick around to help you further.

Community Contributor *

Re: Apply credit memo from one job to multiple invoices under more than one other job.

Because it doesn't relate to the new job!!!  It is a credit memo pertaining to the old job.  If I run a job profitability report I want the credit memo assigned to the correct job, or BOTH will have an inaccurate profitability report.

Community Contributor *

Re: Apply credit memo from one job to multiple invoices under more than one other job.

You are not understanding the issue here at all.  You're assuming I don't understand how to create invoices/credit memos and apply them against eachother.  NOT the case.

 

I encourage you to test your own work as follows:  Create an invoice for "Job A"--Literally use the Quickbooks option to assign a JOB# to the invoice! (I know you think I was only using the "Job" thing to be descriptive in my post--but I'm not). Now it's 3-months later and the customer paid the "Job A" invoice in full.   The customer is now entitled to a credit memo related to "Job A".  Create the credit memo, and in order to maintain ACCURATE historical Job Costing reporting--the credit memo must also be assigned to "Job A" in Quickbooks. 

 

Next, create another invoice for what we will call "Job Q". This invoice is new and not yet paid by the customer.

 

This is a regular customer that buys all the time.  The customer wants their "Job A" credit memo applied against their open invoice for "Job Q", because this happens to be the only unpaid invoice on their account at this time.  Now go to Receive Payments-->Choose Customer-->Open Discounts/Credits as you suggested, and you will see NOTHING.

 

For the people that keep suggesting my work-around is to create the credit memo under (in this example) Job #Q, you obviously don't understand job costing, as that solution makes 2 job reports inaccurate.   DOES NO ONE use the Job Profitability reports that reads these posts???? 

 

In my industry, we can have10 or more unique tradeshows for 1 customer at the same time, and there are lots of associated costs and charges to be invoiced.  Using Job #'s when creating customer invoices is the only way for us to efficiently isolate data related to a single tradeshow.  As I'm entering/paying vendor invoices I also enter the Job # so that I can track my costs related to each tradeshow.  So if you have any understanding of this at all now, your oversimplified answer is likely for a very small business lacking any complexity whatsoever.

BRC
Established Community Backer ***

Re: Apply credit memo from one job to multiple invoices under more than one other job.

@Cheryl2do 

RE: Because it doesn't relate to the new job!!! 

 

I see.  OK, then here's what I'd do:

Setup:

- If you don't have one, create a  wash bank account. I call my simply "Wash".  This is useful for various things in QB.

- If using Opt A below, Go to Edit | Preferences | Payments | Company and uncheck the option "Use Undeposited Funds..."   (Note you can still use Undeposited funds when you do this, but now you'll have options to use other accounts too.)

- If using Opt B below, setup an other charge type item that uses the Wash bank account. (Items that use balance sheet accounts won't appear on the Job profitability report.)

 

To record the refund:

1. Create a Credit memo for Job 1, using the appropriate items for the credit.

2. As you save it, when prompted, create a refund check.  Use your new Wash account for the check.

3. (Opt A)  Record a customer Payment transaction for Job 2 for the credit/refund amount.  As you do, pick the Wash account in the little Deposit To field under the payment type buttons.

OR...

3. (Opt B)  Record a Credit Memo for Job 2 for the credit/refund amount.  Use the  special other charge type item created above.

 

Note:

The reason you can't do this directly is that in general a Job is a name, just like a customer.  Generally, you can't record transactions in AR or AP that impact the balance of multiple names.  The one exception is receiving payments, where payments can be applied to multiple jobs.

Community Contributor *

Re: Apply credit memo from one job to multiple invoices under more than one other job.

Would if I could. Quickbooks won't allow it.  Where's the thumbs down button?