QBO INTL TEST - Applying a credit note, credit or refund for a customer.

Credit notes, credits and refunds can be confusing, so we've provided information that will help explain the differences and how to apply them.

What's the difference between a credit note, credit or refund?
Entering and applying a Credit Note?
Entering and applying a Credit?
Entering and applying a Refund?

Note: If you create a credit note and want to issue a refund instead or vice versa you will need to delete the transaction and recreate it.
How do I locate the credit note or refund and delete it so that I may re-enter correctly?

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What's the difference between a credit note, credit and a refund?
A credit note is a posting transaction which can be applied to a customer's invoice as a payment or reduction.
A delayed credit is a non-posting transaction that you can include later on a customer's invoice.
A refund is a posting transaction which is used when reimbursing a customer money.

This means that:

• Credit Notes are used to offset an existing customer balance.
• Delayed Credits can be included only on an invoice.
• Delayed Credits don't affect a customer balance until they are included on a saved invoice.
• Refunds are used to show money given back to a customer to refund for services the customer is not happy with, to offset a credit balance, merchandise or service not received, or an overpayment.

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Entering a credit note will affect your customer's balance, but will not affect a customer's invoice until it is manually applied.

1. Go to the Plus Sign (+) and select Refund Receipt or Credit Note. (If you don't see this, click show more.)
2. Fill out all required fields
3. Click Save and new or Save and close.

Applying the Credit Note to an invoice:

1. Go to the Plus Sign (+) and click Receive Payment.
2. Complete these fields as follows:
   • Customer: From the drop-down list select the customer the credit note is for.
   • Date: Change if necessary.
   • Amount:, Pymt Method: and Ref#: fields are to be left blank.
   • Memo: (Optional)
   • Deposit To: Leave blank since money isn't actually being deposited with this transaction.
3. Select the Invoice that you want to apply the Credit Note against.
4. Select the Credit Note that you are wanting to apply to the invoice
5. Verify that the total to pay (if any) is correct after applying the Credit Note then click Save.

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Entering a delayed credit will allow you to apply it as a line item on your customer's next invoice.

1. Go to the Plus Sign (+) and click Delayed Credit.
2. Complete all fields
3. Click Save and new or Save and close. .

Applying the Delayed Credit to an invoice:

1. Go to the Plus Sign (+) and click Invoice.
2. On the Customer: drop down list and select the desired customer.
3. Complete fields on invoice.
4. On the left under the Unbilled charges and credits or Unbilled charges, credits, expenses and time section, click on the (+) next to Charges/Credits; this will allow you to view more details about the credits.
5. Click in the box next to the Credit that you want to apply.

6. Once invoice is complete click Save.

Note:  If after choosing give refund or credit, you do not see the sections:
"Create credit note to give to the customer"  or "Enter a credit to appear on the customer's next invoice," then you will need to turn on the preference for delayed charges:

1. Go to the Plus Sign (+) and click Delayed Charge.
2. Check the box for the Delayed Charges feature and fill out necessary fields.
3. Select Save and new or Save and close.

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Refunds given depending on the situation may or may not affect your customer's balance.

1. Go to the Plus Sign (+) and click Refund Receipt.
2. Fill out all necessary fields.
3. Complete steps depending on the type of refund you chose:
   • Type 1: Refund for goods or services that didn't satisfy the customer. (Does not affect customer balance - accounts receivable (a/r), only the bank balance)
     • This option will provide a Refund Receipt  to record reimbursements to customers via cash, cheque, or credit card.
   • Type 2: Pay the customer their outstanding credit balance. (Affects customer balance - a/r)
     • This option will allow you to provide your customer a refund cheque in order to offset any open credits they would like paid out.
   • Type 3: Refund for a prepaid order the customer hasn't received.  (Affects customer balance - a/r)
     • This option is used when a client makes a down payment or prepayment and cancels the order before receiving the goods or services and no invoice or sales receipt was created. The option will lead you directly to entering in a cheque.
         
   • Type 4: Refund the customer for paying you to much. (Affects customer balance - a/r)
     • This option will allow you to provide a refund when a customer overpays and you want to give the customer money back (cash or a cheque) for the amount overpaid.
     • You may either use the Cheque or Expense screen found under the Plus Sign Icon, to record the refund.
4. If Types 2, 3 or 4 were used:
   • Make sure to select accounts receivable for the account at the bottom left of the Cheque or Expense screen.
   • Also make sure that you link the cheque or cash purchase to the open credit or unapplied payment.
   • To do so:
     1. Go to the Plus Sign (+) and click Receive Payment. If you don't see that, click Show More.
     2. Complete the fields as follows:
        • Customer: From the drop-down list select the customer the refund is for.
        • Date: Change if necessary.
        • Amount:, Pymt Method: and Ref#: fields are to be left blank.
        • Memo: (Optional)
        • Deposit To: Leave blank since money isn't actually being deposited with this transaction.
     3. On the left under Credits, click on the plus sign (+) next to Total Credits; this will allow you to view more details about the credits.
     4. Make sure the Credit or Unapplied Payment you want the cheque or cash entry linked to is checked and ensure that the amount is correct.
     5. Under Invoices and outstanding transactions make sure that the Cheque or Cash Purchase you want to link the Credit or Unapplied Payment to is checked and ensure that the amount is correct.
     6. Click Save.

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If you create a credit note and want to issue a refund instead or vice versa you will need to delete the transaction and recreate it.

1. Locate the credit note or refund.
   1. From the left navigation, go to the Customers/Invoicing/Sales (depending on your setup).
   2. To highlight click on the customer's name.
   3. Under Transactions, set Show to All transactions.
   4. Double-click on the credit note or refund.
2. On the bottom under More, click on the Delete button.

Once the credit note or refund is deleted you will want to enter in the intended refund or credit note.