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Create Credit Towards a Specific Invoice

Updated
The Goal: Create a credit memo against a specific invoice to properly reverse revenue recognition when a member changes their mind about a product (membership, event registration, store item, etc.) — as distinct from writing off bad debt.

Before You Begin:

  • Understand the difference: a write-off is for bad debt; a credit against a specific invoice is used when revenue recognition needs to be properly reversed because the member chose not to use the product or service.
  • Locate the invoice on the member's Billing tab or via Finance, Billing section, All Sales/Invoices.

Steps to Create a Credit Against a Specific Invoice

  1. Open the desired member's contact record and click the Billing tab.screencast
  2. Click the ellipsis button (⋯) adjacent to the invoice you wish to credit, then click Create Credit.screencast
  3. Configure the credit fields:
    • Credit Date: Defaults to today. Adjust if needed.
    • Notes (Visible to Recipient): Enter notes describing the credit. These are visible to the recipient in the Info Hub.
    • Credit Template: Choose the template for this credit memo. If no template is selected, the default configured in General Billing Settings will be used.
    • Purchase Details: Read-only. Displays the details of the original purchase and invoice.
    • Credit Items: Lists all fee items charged on the invoice.
      • Description: Read-only. Description of the fee item.
      • Debit Account: The account to be debited when the credit is created. Defaults to the income account for the fee item.
      • Item Total: Total amount for this fee item.
      • Item Balance: Remaining balance for this fee item.
      • Amount: Defaults to the full fee item amount. Enter a partial amount if you only want to credit a portion.
  4. Click Done.

NOTE: You can also create a credit against a specific invoice from Finance, Billing section, All Sales/Invoices.

Common Pitfalls

  • Credit vs. write-off confusion: Use a credit against a specific invoice (not a write-off) when the member decided not to use the product — this correctly reverses the revenue recognition rather than classifying the balance as bad debt.
  • Credit template not set: If no credit template is selected, the system uses the default from General Billing Settings. Verify your default is appropriate before finalizing.

 

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