A credit memo reduces what a customer owes you: goods they returned, a price adjustment, a goodwill credit. Create Credit Memos/Refunds writes one for any customer, with or without an invoice behind it — for example goods returned from a sale made before your books moved to SeroBooks. Once it is saved, you choose what to do with the credit: keep it on the customer's account, give a refund, or apply it to one of their invoices.
To return items from a specific invoice, open that invoice instead and use Return / Refund… or remove the lines; see Edit, copy, void or delete an invoice. The result is the same kind of credit memo, linked to the invoice.
Opening it
- Customers ▸ Create Credit Memos/Refunds
- Home ▸ Refunds & Credits
- Create Credit Memo on the Credit Memos list
From the menu or the Home Page the form opens over the Home Page, and Esc takes you back to the Home Page. From the Credit Memos list it opens on top of the list, and Esc goes back to the list.
Creating one needs the Create Credit Memo right on Credit Memos.
Step by step
- Choose the Customer.
- Check the Date. Credit No. is filled in automatically when you save.
- Add the items being credited with their quantities; the rate and tax fill in and can be changed.
- Leave Return items to stock ticked if the goods are back on the shelf; untick it for goods that came back damaged or for a credit with no goods.
- Optionally type a Memo.
- Click Save & Close (or Save & New).
- In Available Credit, choose what to do with the credit.
The form
| Field | What to enter / what it means |
|---|---|
| Customer | Who the credit is for. Required: Choose the customer the credit is for. |
| Date | The credit memo's date. |
| Credit No. | Automatic — the next number is given on saving. |
| Items grid | ITEM, QTY, U/M, RATE, TAX, AMOUNT. At least one line: Add at least one item. Right-click a line for Insert Line and Delete Line. |
| Return items to stock | On by default: inventory items on the memo go back into stock. Turn it off for damaged goods or a price-only credit. |
| Memo | A note stored with the credit memo. |
| Totals | Subtotal, Tax and Total; on a saved memo also Applied / refunded and Remaining credit. |
| Attachments | Return authorisation — attach the return paperwork. |
The credit must be more than zero: The credit has to be more than zero.
What to do with the credit
After saving, Available Credit asks: This credit memo for $… is saved. What would you like to do with it?
| Choice | What happens |
|---|---|
| Retain as an available credit | The credit stays on the customer's account — Credit memo saved. It stays on (customer)'s account. It is offered under CREDIT NOTES the next time you receive a payment from them, and shows as a credit (Cr) in their balance. |
| Give a refund | Opens Issue a Refund (below). |
| Apply to an invoice | Opens Apply credit · (customer) — the customer's open invoices, as in Receive Payments — to apply the credit to the invoice it is for. |
Issue a Refund
| Field | What to enter / what it means |
|---|---|
| Available credit | How much of the credit is left to refund. |
| Refund amount | How much to pay back. It cannot be more than what is left: Only $… of this credit is left. |
| Issue this refund via | Cheque, Cash, Credit card, Bank transfer or Other. |
| Payment account | The bank or credit card account the refund is paid from (shown when your company chooses the account per payment). |
| Memo (cheque number, reference…) | The cheque number or reference. |
Click Refund — Refund recorded. You can also refund later with Refund on the saved credit memo; Nothing is left on this credit to refund. when it is used up.
A saved credit memo
Opening a saved credit memo (from the Credit Memos list) shows the same form with these buttons:
| Button | What it does |
|---|---|
| Opens the credit memo as a PDF to print. | |
| Refund | Issues a refund of what is left of the credit. |
| Void | Asks Are you sure you want to void this credit memo? — It stays on the customer's account with its number, at zero, marked VOID, and anything it put back on the shelf comes off again. Credit memo voided. |
| Duplicate | A new credit memo with the same customer and lines; this one is not changed. |
| Memorize | Keeps it in the Memorized Transaction List. |
| Save & New / Save & Close | Saves changes. |
What posts to the books
| Account | Debit | Credit |
|---|---|---|
| Sales returns (or the items' income accounts) | Amount before tax | |
| GST/HST payable, PST payable | Tax | |
| Accounts Receivable | Total | |
| Inventory (items returned to stock) | Cost | |
| Cost of goods sold | Cost |
The credit reduces the customer's balance. A refund then posts debit Accounts Receivable, credit the account the refund was paid from. Applying the credit to an invoice moves no money.
Common problems
| Problem | What to do |
|---|---|
| The credit does not appear when receiving a payment. | Check it was retained (not refunded or already applied) and that you are receiving from the same customer. |
| Stock went back in for damaged goods. | Void the memo and enter it again with Return items to stock off, or adjust the stock. |
| Not voided. with a reason | The credit has been applied or refunded, or is in a closed period. Undo the application or refund first. |