Tag Archives: Credit Note

How to create a Credit Note in QuickBooks?

Software: QuickBooks Desktop accounting

Credit Note is a document issued from the seller to the buyer for goods returned or credit for overstated in sales value.

QuickBooks Credit Memo

For QuickBooks Desktop accounting, the Credit Memo (a.k.a. Credit Note) is under the Customers menu (Create Credit Memo/Refund). Credit Memo is using the same sequential number as the Sales Invoice. For example, if the last sales invoice number is 1234, then the next Credit Memo number is 1235. Some accountant may like to have a unique sequential number for the Credit Memo, such as using a prefix to tag the Credit Memo (CN2001, CN2002, etc.); by doing so, the following Sales Invoice number will continue from the Credit Memo saved. For example, if the Credit Memo is CN2002, then the next Sales Invoice will continue as CN2003, you have to change the invoice number manually to keep it consistent.

QuickBooks Discount and Credit

Similar to the Sales Invoice, you cannot use a General Ledger account directly in Credit Memo. Consider creating an Other Charge item and associate it to the relevant income account from the item list and use it in Credit Memo if the credit is not about goods returned. You do not need to enter a negative value for the credit amount, QuickBooks will credit the accounts receivable and debit the relevant income or inventory account automatically. You have an option of retaining it as a credit to offset against future invoices, give a refund, or offset with the existing outstanding invoice when the Credit Memo saved.

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Contra QuickBooks’ Credit Memo with Sales Invoices

Software: Intuit QuickBooks Desktop accounting software

Credit Memo (aka Credit Note or Adjustment Note) is an accounting document given by the seller to the buyer for goods or services returned. A refund of the credit amount can be given or offset against the future purchase.

Use the “Create Credit Memo/Refund” feature in QuickBooks to record the return of goods/services from a customer. QuickBooks gives the user an option to retain as an available credit to offset against the future purchase, give a refund immediately, or apply to an invoice when the credit memo saved. Among the three options, “Retain as an available credit” is most commonly used.

quickbooks-credit-memo

“Retain as an available credit” is use to contra the credit memo against the future purchases. Let’s say you have issued a credit memo and some invoices for a customer. When making payment, the customer can opt to apply the credit memo to the outstanding sales invoices. In the QuickBooks’ Receive Payment transaction, click the “Discount & Credit” button after you have highlighted the sales invoice and apply the credit memo to an invoice accordingly.

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QuickBooks Refunds and Credits

Software: #QuickBooks Desktop #accounting software

A Credit Note (an Adjustment Note) is a sales form given by the seller to the buyer to correct the mistake made in the Sales Invoice or goods returned.

From the Customers menu of the QuickBooks accounting software select Create Credit Memo/Refunds to add a new Credit Note.

Assuming a customer has returned an item, which he has purchased at $254.80 before tax. You record the item with $254.80, a positive value, in the amount field. QuickBooks will automatically debit the income and credit the Accounts Receivable account. If it is an inventory item, QuickBooks will also debit the stock account and credit the Cost of Goods Sold account when you saved the credit note.

You have an option of retaining the credit note as an available credit, give a refund, or offset the credit with an invoice after saving the credit note.

credit-note

Although you did not enter the value with a negative, QuickBooks prints the Credit Note form with a negative in front of the credit value.