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How to Apply Credit Memo to Invoice in QuickBooks Online

QuickBooks Online makes it easy for businesses to manage their finances, including applying credit memos to invoices. A credit memo is a document that is created when a customer returns goods or services, or when a credit is issued for any other reason. Applying a credit memo to an invoice reduces the amount owed by the customer, effectively lowering the outstanding balance. Here is a step-by-step guide on how to apply credit memos to invoices in QuickBooks Online.

1. Open QuickBooks Online and navigate to the Sales tab.
2. Click on the Customers option to view the list of customers.
3. Select the customer for whom you want to apply the credit memo.
4. Find the open invoice you want to apply the credit memo to and click on it to open it.
5. On the invoice page, click on the “Receive payment” button.
6. In the Receive Payment window, you will see the credit memo listed under the Credits section.
7. Enter the amount you want to apply to the invoice in the Payment column next to the credit memo.
8. Verify that the remaining balance is correct and click on Save and Close.

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Frequently Asked Questions:

1. How can I create a credit memo in QuickBooks Online?
To create a credit memo, go to the Customers tab, select the customer, and click on “Create Credit Memo” under the Sales Receipts section.

2. Can I apply a credit memo to multiple invoices?
Yes, you can apply a credit memo to multiple invoices by following the same steps mentioned above for each invoice.

3. What happens if the credit memo amount exceeds the invoice amount?
If the credit memo amount exceeds the invoice amount, the remaining credit will be saved and can be applied to future invoices.

4. Can I unapply a credit memo from an invoice?
Yes, you can unapply a credit memo from an invoice by going to the invoice, clicking on “Receive payment,” and removing the amount applied to the credit memo.

5. Can I apply a credit memo to an already paid invoice?
No, you cannot apply a credit memo to an already paid invoice. You will need to issue a refund or credit the customer for the amount.

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6. Does applying a credit memo affect the customer’s balance?
Yes, applying a credit memo reduces the customer’s outstanding balance.

7. How can I view the history of applied credit memos and invoices?
You can view the history of applied credit memos and invoices by going to the customer’s transaction list and filtering for credit memos and invoices.
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