Invoicing credits, not collecting payment

Thanks for visiting the QuickBooks Community, @secureclean-or-g.

I can help you apply a credit to your customer’s invoice in QuickBooks Online.

If your customer use credits, you can create a Credit memo to apply it to an open invoice. This way, the transaction will reflect as a credit on the invoice, not an additional payment.

Here’s how to create a credit memo in QuickBooks Online:

1. Click the New(+) icon and select Credit Memo.
2. Choose the customer name.
3. Enter the Credit Memo Date.
4. Fill in the necessary information.
5. Click Save and close.

However, if you have already created a credit memo, you can proceed in applying it to the invoice. You can reference this article for the detailed steps: Apply a credit memo, credit or refund to a customer.

In case you'll need to track all the due invoices on a particular day, we can customize your Transaction Detail By Account report.

Feel free to comment if you have questions. I’ll be here to help. More power to your business!

Thank you so much!

I appreciate your valuable time and insight.

I will be sure to add a new credits category, this will be so helpful moving forward. I was able to edit the invoice and adjust the total with a discount. In the memo line, I noted beginning credits, credits used, and the remaining balance.

Is there a way to add all my customer credits as a liability?

Welcome back to the Community, @secureclean-or-g. I'm happy to guide you with the steps on how to add customer's credits as a liability in QuickBooks Online (QBO).

Thanks for sharing an update on how the recommended steps of my colleague work for you. To answer your other question, yes, you can add the credits as a liability by recording them as a retainer deposit in QBO.

Before we proceed, I recommend asking for additional guidance from your accountant to ensure you'll record everything accurately. 

To begin, you'll need to create a liability account for the retainer amount received from customers. Then, create a retainer item to select when entering an invoice or sales receipt for a deposit or retainer payment. Here's how:

Next, if you want to have a separate trust account for the retainers, follow the steps in this link: Create a trust liability bank account. If not, proceed to create sales receipts for the deposit or retainers you receive or invoice if you don't want to receive them directly. 

When finished, you can now use this as payment for your customer for the services you perform for them. For detailed instructions, refer to this article: Record a retainer or deposit. 

Then, you can pull up a Balance Sheet report to track the total amount of a retainer or deposit for each customer. 

Please let me know how this goes. I'd appreciate any details or update you can add. Also, if you have any other follow-up questions about managing customer credits. Have a great day ahead and take care.