How to Create a Credit Memo
This article explains how to create a credit memo, allowing you to place funds on a customer’s account for future use instead of issuing a refund.
Credit memos are commonly used for overpayments, billing adjustments, discounts, or goodwill credits.
Before You Start
Before creating a credit memo, confirm:
The customer has an existing invoice or overpayment, or needs an adjustment
The credit should remain on the customer’s account for future use
You know the credit amount to be issued
Steps to Create a Credit Memo
Navigate to the Customer profile
Go to the Transactions or Invoices section
Locate the invoice or overpayment related to the credit
Select Create Credit Memo
Enter the credit amount
Add an optional note or reason for the credit
Save the credit memo
Once saved, the credit memo will be available on the customer’s account.
What Happens After Creating a Credit Memo
After a credit memo is created:
The credit is applied to the customer’s account balance
Available credit is visible during invoicing and payments
The credit memo appears in the customer’s transaction history
The original invoice remains unchanged for record-keeping
Using a Credit Memo
Credit memos can be partially or fully applied to future invoices
Any remaining balance stays on the customer’s account until used
Credits are automatically deducted when applied
Credit Memos vs. Refunds (Important)
Credit Memo: Keeps funds on the customer’s account for future invoices
Refund: Returns money back to the customer
If a customer plans to return or has ongoing work, a credit memo is often the preferred option.
Important Notes
Credit memos are internal and not standalone payments
Credits do not delete or alter original invoices
All credit activity is tracked for reporting and auditing purposes
Need Help?
If you’re unsure whether to issue a credit memo or a refund, contact support before completing the transaction to ensure accuracy.