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What is the point of Line Items on Credit Memos?

I'm trying to figure out how to issue a Credit Memo to a Customer but am stuck on Line Items. My use case is issue a Credit Memo a Customer to be applied to an outstanding or future Invoice, but QuickBooks seems to want me to specify an Item (Product or Service) the Credit Memo is for. I'm not sure what Item to specify, as I don't want the Credit Memo to apply for just a specific Item. The purpose of issuing my Credit Memo is for promotional reasons or overpay and has nothing to do with a specific Item.

 

Furthermore, I've been unable to determine what specifically the point of the Line Items on a Credit Memo is. When testing in my QuickBooks Sandbox account, it seems a Credit Memo I issue to a Customer is always applied to the next available Invoice, regardless of if the Invoice contains a Line Item referencing an Item the Credit Memo also references in a Line Item.

 

I understand I could use a DiscountLineItem on the Invoice instead, but I'd like to do this with a Credit Memo as the reporting seems more robust and I can track the specific date the Credit Memo is issued (as opposed to a DiscountLineItem inheriting the Invoice's date).

 

Can anyone help me figure out the best way to use QuickBooks for my use case of issuing a Credit Memo for a Customer that has nothing to do with a specific Item?

Solved
Best answer April 16, 2020

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QuickBooks Team

What is the point of Line Items on Credit Memos?

Hey there, @bricehartmann

 

Thank you for reaching out to us here in the Community. 

 

The main reason to have an item listed on the credit memo is to account for any inventory items properly. Meaning that when the invoice was paid, whatever items were sold, inventory would decrease. Then when issuing credit, the same items can be selected to re-add to the quantity for those inventory items.

 

Since you want to offer a credit for promotional reasons, you'll want to set up a non-inventory item named "Promotion" or whatever you'd like. Then, you'll select your Promotion item when creating a credit memo. 

 

For more information, you can check out the details outlined in these articles:

 

Please don't hesitate to let me know if you have further questions or concerns. I'll be here to help you every step of the way. You can always reach back out to the Community or me anytime you need us. Take care! 

View solution in original post

2 Comments 2
Highlighted
QuickBooks Team

What is the point of Line Items on Credit Memos?

Hey there, @bricehartmann

 

Thank you for reaching out to us here in the Community. 

 

The main reason to have an item listed on the credit memo is to account for any inventory items properly. Meaning that when the invoice was paid, whatever items were sold, inventory would decrease. Then when issuing credit, the same items can be selected to re-add to the quantity for those inventory items.

 

Since you want to offer a credit for promotional reasons, you'll want to set up a non-inventory item named "Promotion" or whatever you'd like. Then, you'll select your Promotion item when creating a credit memo. 

 

For more information, you can check out the details outlined in these articles:

 

Please don't hesitate to let me know if you have further questions or concerns. I'll be here to help you every step of the way. You can always reach back out to the Community or me anytime you need us. Take care! 

View solution in original post

Highlighted
Level 1

What is the point of Line Items on Credit Memos?

"Then when issuing credit, the same items can be selected to re-add to the quantity for those inventory items."

 

What do you do in the case that you don't want those inventory items to go back to inventory? For example, a damaged item? 

 

You're recording a credit memo as a return so they get a credit for next time, without restocking the items. 

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