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cdhodgdon
Level 3

How to zero out a credit memo

Looking for the best option to either clear out a credit memo or remove the value for a customer.

In the past, we gave our customers a referral credit for sending us a new customer.  We have discontinued this practice as we don't generate enough business that way.  Some of these customers that we gave this credit too, still have this credit on their account and they are no longer in the area, or just don't care about it and I would like to zero out their accounts, so it does not show on there.

What is the best way of doing this without having to a check or something, that would affect the actual cash in our system?

Thanks

Solved
Best answer December 10, 2018

Best Answers
Raywhite28
Level 7

How to zero out a credit memo

You have to create an invoice to offset the credit & then use the receive payment screen to apply the credit to the invoice.

View solution in original post

Raywhite28
Level 7

How to zero out a credit memo

@egotz

Doesn't matter the credit memo is from 2013.

View solution in original post

Raywhite28
Level 7

How to zero out a credit memo

You're not adding cash. If you have a credit for $100 & you create an invoice for $100, there is no cash. The credit & invoice wash each other out.

View solution in original post

23 Comments 23
Raywhite28
Level 7

How to zero out a credit memo

You have to create an invoice to offset the credit & then use the receive payment screen to apply the credit to the invoice.
cdhodgdon
Level 3

How to zero out a credit memo

Won't that add cash to my system that does not exist or is it just going to make it a wash?
brenda2
Level 1

How to zero out a credit memo

It may not add cash, but it does increase sales which are reportable for sales tax...
qbteachmt
Level 15

How to zero out a credit memo

A credit memo will Decrease Sales, because of what you list on that credit memo.
Raywhite28
Level 7

How to zero out a credit memo

You are correct Brenda. However, the original credit memo reduced sale & was reportable on the sales tax report. This just washes it out.
Raywhite28
Level 7

How to zero out a credit memo

@cdhodgdon

 Creating an invoice to offset a credit memo for the same amount doesn't add cash.
Raywhite28
Level 7

How to zero out a credit memo

@egotz

Doesn't matter the credit memo is from 2013.
Raywhite28
Level 7

How to zero out a credit memo

You're not adding cash. If you have a credit for $100 & you create an invoice for $100, there is no cash. The credit & invoice wash each other out.
egotz
Level 1

How to zero out a credit memo

does it matter if the Credit Memo is from 2013? we are on cash basis
cnr
Level 1

How to zero out a credit memo

We created a bogus invoice and applied the credit. The credit balance was showing as 0 until we hit OK and the invoice was marked as paid but the credit amount remained. How do we fix this?

AlcaeusF
Moderator

How to zero out a credit memo

Hello cnr,

 

Thank you for posting in the Community. I'm here to assist you with using the customer credit balance on an invoice.

 

The credit balance of the customer will show as negative on the customer list. Let's make sure to use the available credit on an invoice by selecting the Apply Credits option.

 

Here's how:

  1. Double-click the open invoice.
  2. Click the Apply Credits.
  3. Below Available Credits, put a check mark on the credit amount.
  4. Click Done.
  5. Make sure to click Save & Close.

Once done, you can go back to the customer list and check if the balance changes. I've also attached a couple of screenshots for your guide.

 

I'll be on a lookout on how this goes. I encourage you to add some screenshots by posting a comment down below.

 

 

 

 

WINWIN
Level 1

How to zero out a credit memo

We have lots of small credit amount for all kinds of different customers and stores (1000 different stores), what is the easiest and efficient way to clear all of them without by clicking each customer's account? I was looking for solution though transaction pro software but no progresses. Please advise. Thanks.

 

 

Anonymous
Not applicable

How to zero out a credit memo

Hi there, WINWIN.

 

Currently, there isn't a way to delete customer credits without opening each customer. You'll need to open the customer's profile first and open the credit to delete it. it. 

 

For now, you can request your preferred way of deleting these transactions to our developers. Just click Help  at the top, select Send Feedback Online, and choose Product Suggestion. 

 

Reach us again if there's anything else you need. 

snikes123
Level 1

How to zero out a credit memo

A credit was given by mistake and want to cancel it

 

JanyRoseB
QuickBooks Team

How to zero out a credit memo

Hello there, @snikes123.

 

Good to see you here in the QuickBooks Community. I'm here to help walk you through on how to cancel the credit applied to the transaction. 

 

Here's how to remove a credit memo from an invoice transaction:

  1. Locate the appropriate credit memo.
  2. Press Ctrl + H to display History.
  3. Double-click the invoice.
  4. Choose Apply Credits.
  5. On the Previously Applied Credits window, clear the selection for credit.
  6. On the Apply Credits window, select Done.
  7. On the invoice, select Save and Close.

However, if this is a vendor credit from a bill, you can follow the detailed steps on to remove it: Remove or unapply a credit from an invoice or bill

 

That should do it! Don't hesitate to leave a comment below if you have additional questions about the credit memo. I'd be happy to answer them for you. Have a great day. 

jeanylum
Level 1

How to zero out a credit memo

What do you put in the Product/Service column to zero out a credit memo?  Do you have to create a new item for this?

JoesemM
Moderator

How to zero out a credit memo

Hi there, @jeanylum.

 

You don't need to create a new product memo. You'll want to create an invoice to offset the balance. Let me show you how: 

 

  1. Go to the Customers menu, select Create Invoices.
  2. From the Customer: Job drop-down, select a customer or customer job. 
  3. Fill in the necessary information the same with your credit memo.

Once you've done creating an invoice then we can  received payment to apply the credit to the invoice.

 

I've got here an article to know more about credit memo: Give your customer credit or refund in QuickBooks Desktop for Windows.

 

You can visit our website in case you need tips and related articles in the future.

 

Let me know if you need anything else. All the best! 

Supergirl17
Level 1

How to zero out a credit memo

We have a Customer Credit Memo dated 2018 that they didn't use. How do we close it without applying to an invoice? What is the Journal Entry given that it's from 2 years ago.

IntuitLily
Moderator

How to zero out a credit memo

Thank you for joining the thread, @Supergirl17.

 

There are other ways you can write off a customer's credit in QuickBooks. You can create a journal entry, however, be sure to reach out first to your accountant before using this option.

 

For customers with an overpayment, you can perform the following steps:

 

  1. Go to the Company menu and select Make General Journal Entries.
  2. Change the date and fill in the entry number if necessary in the journal entry.
  3. Select the Account field and select Accounts Receivable from the drop-down list.
  4. Enter the amount under the Debit column, tab to the Name column and select a Customer Name from the dropdown list.
  5. In the next line, select the offset account and enter the amount under the Credit column. The offset account is usually an Expense account.

For more information, you can check out this article: Write off customer and vendor balances.

 

Keep me posted if you need anything else. I'm here to assist if you need help. Have a good one.

merecarr17
Level 1

How to zero out a credit memo

Hi. When using the General Journal method, is it recommended that I change the date on the new general journal to the date of the original credit even though it is in a closed period? Or should I leave today's date?

merecarr17
Level 1

How to zero out a credit memo

Hello,

 

When creating the offset Journal entry, should I change the date of the entry to the date of the original credit even though it is from a closed period or should I leave it as today's date?

Akurtz2021
Level 1

How to zero out a credit memo

When making an offset JE in QBO, wouldn't you want to void the credit memo, then make the offsetting JE for the date of the invoice so that it doesn't change account balances for the year they occurred?

Angelyn_T
QuickBooks Team

How to zero out a credit memo

I appreciate you for joining the thread, @Akurtz2021.

 

Yes, you can void or delete the credit memo, then go ahead with recording a journal entry. I'm here to guide you with the process.

 

To void the credit memo:

 

  1. Click on Sales at the left pane, then select All Sales.
  2. Filter the transaction type to the credit memo.
  3. Locate the transaction from there, then open it.
  4. Tap on More, then select Delete.

 

When creating an entry, I would recommend seeking assistance from a professional accountant. This way, he/she can assist with using the correct accounts and track your transactions accordingly.

 

For more tips about recording journal entries in QuickBooks Online, you can open this article: Create a journal entry in QuickBooks Online.

 

Moreover, here's an article you can read more about applying a credit memo to an invoice.

 

If you have any other questions about managing your customer transactions, please let me know by adding a comment below. I'm always here to help. Have a good one!

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