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Credit memos: create, apply and view

Updated
The Goal: Give a contact a credit, either as a standalone credit memo or against a specific invoice, then apply it, find it later, or void it.
Before You Begin:
  • Credit memos are useful when you don’t want to refund money; for example, an event is canceled and you give registrants credit toward a future event or invoice.
  • If you don’t choose a Credit Template, the default on your General Billing Settings page is used, at Finance > Administrative > Billing Settings. Check that default is the one you want.
  • Best practice: use the same fee item that prompted the credit, and for event registration credits include the full event name in the notes. Both make the Credit Memo Report much easier to filter.

Which kind of credit to use

Situation Use
You want to give the contact credit to use on a future or other open invoice Create a credit memo, then apply it
The member changed their mind about something they were invoiced for (a membership, registration, store item) and the revenue needs reversing Credit a specific invoice
The member won’t pay and the balance is bad debt A write-off, not a credit

Create a credit memo

You can also add one from Finance, Billing section, All Credit Memos. These steps use the contact record.

  1. Open the contact and click the Billing tab.
  2. Click the arrow next to Enter Check/Payment and choose Add Credit Memo.
    Contact record Billing tab with the arrow next to Enter Check/Payment expanded and Add Credit Memo boxed in the drop-down
  3. On the Add Credit screen:
    • Issued To Contact: filled in automatically.
    • Issue Date: defaults to today. Change it if needed.
    • Credit Template: optional; the default is used if you leave it blank.
    • Notes (Visible to Recipient): describe the credit. The member sees this in the Info Hub.
    • Items / Fee Item: choose the fee items for the credit. Click + to add more. Cost, quantity and tax fill in from the fee item and can be changed.
    Add Credit screen with the Issued To Contact, Issue Date, Credit Template, Notes and Items/Fee Item fields visible and the Items grid boxed
  4. Click Done.

Apply a credit memo to an invoice

Available credits show in the Summary section of the contact’s Billing tab.

  1. On the contact’s Billing tab, click the actions icon for the credit.
  2. On the Apply Credit screen, set the Applied Date (defaults to today; it can’t be before the credit’s issue date).
  3. Select the invoice(s) to apply the credit to.
  4. Click Done. The invoice is paid by the credit; any remaining balance shows in the billing history.
  • Apply credits automatically: turn on Auto-Apply Credits to Newly Created Invoices on the General Billing Settings page. Invoices created by scheduled billing then use any available credit before payment is processed. See Configure System to Auto-apply Credits/Overpayments.
  • Info Hub: members can see their credit memos but can’t apply them. Your staff applies them.

Credit a specific invoice

Use this when a member decides not to use something they were invoiced for. It reverses the revenue properly instead of treating the balance as bad debt.

  1. Open the contact and click the Billing tab. (Or go to Finance, Billing section, click All Sales/Invoices.)
    Contact record with the Billing tab selected and the invoice list visible, Billing tab boxed
  2. Click the ellipsis (⋯) next to the invoice, then click Create Credit.
    Invoice row on the Billing tab with the ellipsis menu open and Create Credit boxed
  3. Fill in the credit:
    • Credit Date: defaults to today.
    • Notes (Visible to Recipient): shown to the member in the Info Hub.
    • Credit Template: the default is used if you leave it blank.
    • Purchase Details: read-only details of the original purchase and invoice.
    • Credit Items: every fee item on the invoice, with its Description, Debit Account (defaults to the fee item’s income account), Item Total, Item Balance and Amount. Amount defaults to the full item; enter less to credit part of it.
  4. Click Done.

Find and view credit memos

  • One contact: open the contact and click the Billing tab.
    Contact record Billing tab with the credit memo list boxed
  • All contacts: go to Finance, Billing section, click All Credit Memos. Use the filters to narrow the list, for example to credits with an open balance.
    All Credit Memos page under Finance, Billing section, with the filter options panel boxed and an open-balance filter selected
  • Reporting: use the Credit Memo Report to track all credit memos.

Void a credit memo

A credit memo can be voided only if it isn’t applied to an invoice; unapply it first. See Void or delete a credit memo.

Common Pitfalls
  • Credit not used on new invoices: credits aren’t applied automatically unless Auto-Apply Credits to Newly Created Invoices is on.
  • Error when applying: the Applied Date can’t be before the credit’s issue date.
  • Credit vs. write-off: if the member chose not to use the product, credit the invoice so revenue is reversed. Write-offs are for bad debt.
  • Hard-to-filter reports: use the original fee item and include the event name in notes.
  • Expecting members to apply their own credit: they can see it in the Info Hub but staff must apply it.
  • Can’t void: the credit is applied to an invoice. Unapply it first.

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