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Hello,
I have a transaction from the previous year and our books are closed for the year. There is a credit sitting in the payment we received and now the customer wants a refund. We issued a cheque today is there a way we clear that overpayment sitting without changing the transaction in the previous year.
Your concern ends here, @aastha.
Does the balance of the customer have a negative value from the previous year because of the credit? If yes, you'll want to write a check and associate it with an Accounts Receivable account. Then, link it to the credit. Doing this won't affect your last year's transactions. Here's how:
However, if the balance isn't negative, you can write a check using the account used for the credit. Most importantly, I still recommend seeking help from your accountant so they can offer you some advice on recording this matter.
As always, feel free to visit our QuickBooks Community help website if you need tips and related articles in the future.
Please know that I'm just a reply away if you need any further assistance managing your customer's credit.
This work around is what I do with the exception that I have created a service item called "Overpayment".
I write an invoice for "overpayment" and apply the unapplied payment. Then I write a credit memo for the same, add the PO number and any other notes to the credit memo and send it. It takes the funds off the account as unapplied payment and puts it back on the account as a credit memo.
We use QBO. I have had this issue come up numerous times. What is the best way to give the customer a credit memo, with a number, that they can use when paying multiple invoices on their next check? The credit is from a overpayment on their part due to a keying error. Any suggestions would be greatly appreciated. The simpler and less-complicated the better. Thanks.
Good evening, @LDunlap1.
Thanks for following the thread and sharing your concerns.
I understand the importance of this feature request, however, at this time, there isn't an option to provide your customer a credit memo number to apply to their invoices. In this case, you'd need to manually create single credit memos and apply them to individual invoices. You can learn more about the credit memo process in Applying a credit memo.
In the meantime, I've submitted a feedback request on your behalf to our Product Development Team, so this can be considered in a future update.
You can follow all of our latest happenings and updates by using our Blog Site.
Please let me know if there is anything else that I can do for you. I'm happy to lend a hand anytime. Take care and have a wonderful rest of your day!
Thank you for submitting a request to the product development team.
My work around is to create a credit memo in the amount of the overpayment, send it to the customer, then go back and delete the credit memo. When they pay their next group of invoices and use the credit memo, I will match it with the overpayment that is sitting as a credit on the customer account. It's kind of a clunky way to do it, but it's all I could come up with. Hopefully everything will reconcile out in the end.
Thanks for your response.
Hey LDunlap1,
You are most certainly welcome! Your workaround is a great idea. I would appreciate it if you follow up with your results, and hopefully, it will indeed reconcile out! Until then, take care and have a lovely day.
Was this ever resolved, I have the same issue - it's 2021.
While on this subject a couple years later...
I was doing some searching regarding posting a payment and the customer overpaid and left it as a credit and I wanted to print the credit memo the email to the customer. BUT, Quickbooks never assigns a Credit memo number. Shouldn't it do that? Or is that something we should have set up in the beginning? If so, how do I fix this now?
Thank you in advance! :)
Jodi
I can share some information with adding a credit memo number, @jedwards5682.
You can use a credit memo to record a return when a customer returns items for which you have already recorded an invoice, customer payment, or sales receipt.
In QuickBooks Desktop (QBDT), you can customize the template to include the Credit memo number on the page.
Follow the steps below:
You can now go back to the Credit Memo page and enter a Credit No. See this article for more information about adding and removing fields to your credit memo or your other sales forms: Use and customize form templates.
Refer to the following article for detailed guidance in creating a credit memo or a check in QBDT: Give your customer a credit or refund in QuickBooks Desktop for Windows. That'll also show you how to handle the credit by either retaining it as available credit, by giving a refund, or applying a credit to an invoice.
Let me know if there's anything else that I can help with your credit memo and or anything else, by leaving a reply below. Take care and have a wonderful day!
The issue I have with this response is that QB NEVER asks me if I want to create a credit memo. I'm trying to create a credit memo from the unapplied overpayments on a customers account, but does not give me an option to connect the over payment to the credit memo. If I enter the amount of the overpayment QB duplicates the credit. The best way I've found to deal with it is to create the credit memo, then delete it when the customer applies the credit to a future invoice. It's the only way to NOT allow QB to duplicate the credit. It's ridiculously wonky.
Back to the original question, How do I create a credit memo for a customer from an overpayment?
Hi AZFB!
Thanks for joining this thread. Allow me to assist you in handling the customer overpayment.
Upon recording a customer payment with an amount more than the amount due, the Overpayment section will appear where you can select to leave the overpayment as credit. You'll want to open the payment transaction you created and check it. Please refer to this screenshot:
In addition, here's another way to create a credit memo:
I'm adding this article for your reference: Give your customer a credit or refund in QuickBooks Desktop for Windows. This explains more on how to create a credit memo or refund check.
Do you need help in balancing your books? Check this link: Reconcile an account in QuickBooks Desktop. This also explains how to match your bank and credit card statement to your real-life accounts.
Leave a comment again here if you have other concerns. I'll help you!
When I saved the payment received it did not give me option to create a Credit Memo. Any reasons, why?
This "overpayment" never appeared in QBO when hitting "Save & Close" or never gave me an option to create a Credit Memo. Anyone find a solution for this?
Hello, donerightwaybookkeeping.
I'll share some helpful details with you on why QuickBooks Online doesn't create a credit memo when recording an overpayment.
QuickBooks Online doesn't actually create a credit memo when recording an overpayment.
Rather than recording two transactions (credit memo and the payment transaction), the system will just record a single Payment transaction with a negative balance (indicating the overpayment). This is to avoid redundancy and keep your customer's transactions list tidy.
Here's a sample screenshot:
When you create the next invoice, the overpayment will be automatically applied to it.
There are ways to handle the overpayment. If you'd like to record it as a tip or a refund, you can check this article for the steps: Handle a customer credit or overpayment in QuickBooks Online.
In addition, if you're recording an overpayment for a customer with multiple invoices, the system will automatically check those invoices to apply the overpayment (in the Receive payments screen).
If you want to handle the credit in the future, simply open the Payment transaction and uncheck the invoice you want to leave as unpaid.
Do you use the Online Banking feature to record and categorize your bank statement with QuickBooks' records? If you need help handling those downloaded transactions, you're more than welcome to use this article as a guide: Categorize and match online bank transactions in QuickBooks Online.
I'm always down to answer any other questions you might have when handling customer payments. If you have any other concerns with QBO, lay down the details below and I'll be around to help.
I just discovered that when you are in the "Receive Payment" window were your overpayment is recorded, you can click on the "Print" arrow and it gives you the option to print credit. Unfortunately it does not allow you to describe why the reason of this credit to the customer but I think you could fill out by hand the reason for this or you can attached documentation for your customer that will support this credit and let them know this is due to an overpayment.
I didn't read ALL of this thread because it sometimes goes around in circles with QB staff providing answers to questions not asked.
It was clarified to me that CREDITS on accounts do not mean a credit memo exists. And as said early, the credit does not show up on the customer transaction listing. The only place I see it is in the credits popup when you're in the receive payments window.
I dunno, I'll bookmark this and try to decipher some sort of reliable, sensible workaround described herein.
Thank you for this! Now, I wish we could modify it!!
I always just add the over payment to the invoice as a misc. item and then issue a credit memo for the misc. item and identify it as an over payment. This way you have a physical credit memo with a number and an easy way to issue a check if necessary.
I printed the credit memo but Quickbooks did not actually create one. That is a problem.
Thanks for joining in this forum, @Designer2009.
As an additional insight, the system will only record a single Payment transaction with a negative balance rather than two transactions (the credit memo and the payment transaction) (indicating the overpayment).
This is to prevent duplication and keep the list of transactions for your customers organized.
You can manage the overpayment in a few different ways. Check out this post for further instructions: Handle a customer credit or overpayment in QuickBooks Online.
Get back to us here at any time if you have additional concerns. Take care!
I'm working in QB Desktop Enterprise. There has to be a way for QBs to transfer that credit into an actual credit memo, a coding algorithm that would solve this problem. At least I could scan the CM created when I entered the pymt and email that to my customer; there is no corresponding number for them to enter into their accounting program and nothing to match it to on our side.
I recognize your need for the option to transfer credit to an actual credit memo in QuickBooks Desktop, @Designer2009.
I suggest sending us feedback about having this feature in QBDT. This allows our product engineers to include this functionality in the program.
To submit feedback, follow these steps:
We appreciate your patience while we're working on this for you. Don't hesitate to comment back if you have other concerns about handling credits in QBDT. It's our pleasure to assist. Stay safe!
So you would leave it showing as a payment and not a credit? Because our customer over paid and we received payment as normal and it shows a negative balance but there is no credit memo and when i print a customer open balance report it list the overpayment as a "payment" and not a credit. I'm left to assume that a credit memo would only be used in the case of a physical merchandise return?
My thoughts exactly! Thank you for suming all that up. The fact that we can't edit the credit memo once payment is posted is very underwhelming. The fact that we can no longer access those credit memos from payments and emailed directly from Quickbooks is even more underwhelming. Wondering if the way you get around this (when customer pays a whole invoice + a bit more) is to receive the payment for the exact amount of the invoice and then there after make a credit memo for the remaining credit? Thanks again for posting!
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