QuickBooks 2005: The Missing Manual

Handling Refunds and Credits

If a customer returns a product or finds an overcharge on the last invoice, you have only two choices: issue a credit against the customer's balance or issue a refund by writing a check. In the bookkeeping world, the documents that explain the details of a credit are called credit memos. On the other hand, when a customer doesn't want to wait to get the money she's due or she isn't planning to purchase anything else from you, a refund check is the logical solution. In either case, refunds and credits both begin with a credit memo, shown in Figure 8-19.

Creating Credit Memos

Here how you create a credit memo:

1. Choose Customers→Create Credit Memos/Refunds.

   QuickBooks opens the Create Credit Memos/Refunds dialog box. If you stay on top of your invoice numbers, you'll notice that the program automatically uses the next invoice number as the credit memo number.

   

   Figure 8-19.  A credit memo is like an invoice, but the items you add represent money flowing from you to the customer instead of the other way. Don't enter negative numbers. QuickBooks calculates the money due based on the value of the items.

2. As you would for an invoice, choose the Customer:Job, choose a class if you use classes, and if necessary, choose the credit memo template you want to use.

3. In the line item table, add a line for each item you want to credit.

   Be sure to include all the charges you want ...