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Level 1

How to issue a credit memo for billable expenses with markups?

We add certain billable expenses to our customers invoices and mark them up by 10%. Our P/L shows both the original cost plus the markup as a separate item. I need to issue a credit memo for a billable expense. How do you create the Markup and Expense credits? QBO support doesn't know.
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QuickBooks Team

How to issue a credit memo for billable expenses with markups?

I've got steps to ensure you can create a credit memo for a billable expense, @k-handler.

 

You'll have to simply create a credit memo by selecting the item manually, and then apply it to the invoice associated with a billable expense. 

 

First, create a credit memo. Here's how:

 

  1. Click the +New icon, and then choose Credit Memo under the Customers section.
  2. Enter all the info needed such as the customer name, the item, etc.
  3. Select Save and Close once done.

Once done, apply the amount to the created invoice. You can do it either manually or using the auto-apply credits feature. To do it manually, here are the steps how:

 

  1. Click + New, and then select Receive payment.
  2. Enter the customer’s name, and then fill out the required fields.
  3. In the Credits section, choose the credit memo from Step 1. Then, in the Payments column, enter how much credit your customer wants to use.
  4. Hit Save and close.

On the other hand, you can turn on the Automatically apply credits option in the Account and settings page to auto-apply these credits to a newly created invoice. Below are the steps how:

 

  1. Go to Settings , and then select Account and Settings.
  2. Choose the Advanced tab, and then tap Edit ✎ in the Automation section.
  3. Pick Automatically apply credits.
  4. Hit Save, and then Done.

For more details, please check out this resource: How to create and apply credit memos.

 

You'll also want to customize your invoices and reports to personalize their info and formats.

 

Feel free to get back here in the Community if you've got more QuickBooks concerns. Take care and have a nice day.

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Level 1

How to issue a credit memo for billable expenses with markups?

No John, that doesn't do it.  That's because the line items that are on the bill are added from a "billable expense" item on the right side--they are NOT individual product or service lines that can be added to the creditm memo. They include both the billable expense (say $100) and the "markup" say $50.   I can type these in the description on the credit memo, but then the customer will see the line items "Expense" and "Markup" on the credit memo.  Net, doesn't mirror the original bill.  Also, lets assume this is the only transaction we have. If I just add those together and put down a credit for "Expense- $150", then the "Expense" line item on the p/l will say -$50 because only $100 was charged there, and the markup line will still say $50.

PLEASE...truly research this and try before posting an answer.

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Moderator

How to issue a credit memo for billable expenses with markups?

Thanks for getting back to us, @k-handler,

 

I can help you account for this credit in QuickBooks, but I will need a few information to make sure we're heading to the same direction. First, are you processing a return for a client? Also, are you giving them the entire amount they paid, which is the $100 billable expense and $50 markup?

 

I need your confirmation for this. Add the details in the comments below.

 

In the meantime, check out this workaround, where you can process the credit memo for $100 and add the $50 for mark up as a journal entry to clear it in the Profit and Loss report. See these sample screenshots of the series of process for reference:

 

 


 

When you apply the credit memo and journal entry to the invoice, choose both transactions in the Credits section. It looks like this:

 

 

Otherwise, if you are the one who receive a credit from a vendor, you can simply use a vendor credit for it. The following links will help you with the process:

I want to hear back from you about this, as I want to make sure this is resolved. Connect with me again by clicking the Reply button below. Have a good one!

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