Applying a credit memo to an open invoice

After recording a credit memo for a customer, the credit will immediately be applied to the open balance for that customer. Let’s assume that Janet Jetson has sent a payment in for invoice #1005. Navigate to the Receive Payment window, select Janet Jetson from the Customer drop-down, and the following screen will display:

Figure 6.29: Janet Jetson invoice with credit memo applied

As you can see, the original invoice amount was $1,500.00, and now that the credit has been recorded, the open balance has been reduced by the $250 credit amount (shown in Figure 6.29) to $1,250.00.

If you do not invoice customers through QuickBooks, you can issue a refund check by going to + New and selecting Check, listed below the Vendors column. This will allow you to refund a customer instead of creating a credit memo since you will never have an invoice to apply it to.