How to Apply Credit to Invoice in QuickBooks Online
QuickBooks Online is a powerful accounting software that allows businesses to efficiently manage their finances. One important feature of QuickBooks Online is the ability to apply credit to an invoice. This feature can be extremely useful when a customer has an outstanding credit with your business, and you want to apply it to an invoice to reduce the amount owed. In this article, we will guide you through the process of applying credit to an invoice in QuickBooks Online and answer some common questions related to this feature.
Step 1: Creating a Credit Memo
Before you can apply credit to an invoice, you need to create a credit memo. To do this, follow these steps:
1. Log in to your QuickBooks Online account and click on the “+” icon at the top right corner of the screen.
2. Under the “Customers” tab, select “Credit Memo.”
3. Fill in the necessary details, including the customer’s name, the date, and the products/services for which the credit is being issued.
4. Save the credit memo.
Step 2: Applying the Credit to an Invoice
Once you have created the credit memo, you can apply it to an invoice. Here’s how:
1. Go to the “Sales” tab on the left-hand side of the screen and select “Customers.”
2. Locate the customer for whom you want to apply the credit and click on their name to open their profile.
3. Find the invoice you want to apply the credit to and click on the “Receive payment” button.
4. In the “Receive Payment” window, you will see the available credit under the “Credits” section.
5. Click on the “Apply credit” link next to the credit amount.
6. Check the box next to the invoice you want to apply the credit to.
7. Click on the “Save and close” button.
Common Questions and Answers:
1. Can I apply credit to multiple invoices at once?
Yes, you can apply credit to multiple invoices at once. In the “Receive Payment” window, simply check the boxes next to the invoices you want to apply the credit to.
2. What happens if the credit amount is greater than the invoice amount?
If the credit amount is greater than the invoice amount, the remaining credit will be saved and can be applied to future invoices.
3. Can I apply credit to a partial payment?
Yes, you can apply credit to a partial payment. In the “Receive Payment” window, you can enter the partial payment amount and then apply the credit to the remaining balance.
4. How can I check if a customer has any available credit?
To check if a customer has any available credit, go to the “Customers” tab under the “Sales” menu. Open the customer’s profile and check the “Available Credit” section.
5. Can I apply credit to an invoice that has already been paid?
No, you cannot apply credit to an invoice that has already been paid. You can only apply credit to open or unpaid invoices.
6. Can I apply credit to an invoice for a different customer?
No, you can only apply credit to an invoice for the same customer.
7. Can I apply credit to an invoice for a different product/service?
Yes, you can apply credit to an invoice for a different product/service. However, the credit must be for a product/service that you have previously sold to the customer.
8. How do I create a credit memo for a customer who has already paid the invoice?
If a customer has already paid the invoice, you can still create a credit memo for them. However, you will need to manually refund the amount to the customer outside of QuickBooks Online.
9. Can I apply credit to an invoice for a past period?
Yes, you can apply credit to an invoice for a past period. QuickBooks Online will automatically adjust the accounts receivable and income for the respective periods.
10. What happens if I delete a credit memo after applying it to an invoice?
If you delete a credit memo after applying it to an invoice, the credit will be removed from the invoice, and the invoice balance will be restored.
11. Can I apply credit to an invoice using the QuickBooks Online mobile app?
Yes, you can apply credit to an invoice using the QuickBooks Online mobile app. The process is similar to applying credit through the desktop version.
Applying credit to an invoice in QuickBooks Online is a simple yet powerful feature that can help you manage your customer’s outstanding credits efficiently. By following the steps outlined in this article, you can easily apply credit and streamline your accounting processes.