Credits, returns and deductions in dispute

Issue a credit

1. 1

   Open the invoice it relates to

   Or start from Credits.

   Invoices
2. 2

   Click Issue credit

   Choose the reason (a return, damage, a short shipment, a pricing error, an allowance, a retailer chargeback) and the lines or amount.

3. 3

   Apply it

   Apply credit to the invoice, or to any open invoice of that customer. It posts to QuickBooks as a credit memo.

Credit that isn't applied waits on the customer's account and comes off what they owe. When they pay net of it, the payment screens use it in the same step (see Record payments).

Move a credit to another invoice

Open the credit under Credits. Under Where it went, click Take back beside the invoice: that invoice owes the amount again, and the credit is on the account. Then Apply it where it belongs. Both steps are in the audit trail, and both happen in QuickBooks too. A write-off, and a credit that settled a dispute, stay where they are.

Deductions in dispute

When a customer pays short, the gap can be held as a deduction instead of sitting as an unexplained balance. Under Credits, Disputes lists each one with its reason and age.

• Accept it, and it becomes a credit memo with its reason.
• Keep it in dispute with a note (Record dispute) while you gather proof of delivery.
• When the customer pays it after all, record the payment against it.

Write off what won't be collected

Open the invoice and click Write off. It becomes a credit memo on your write-off item (in QuickBooks, a "Bad debt" item on your bad-debt expense account, chosen under Settings → Integrations), applied to the invoice.

• A small balance, up to the limit under Settings → Credit & collections ($5 unless you change it), is written off at once: a bank fee taken from a payment, say. You can also write it off while recording the payment.
• Bad debt is asked for with a reason, and written off only when someone else in Finance approves it. They can decline it, and whoever asked can withdraw it.