How Do I Create a Credit Note or Credit Memo ?

You sent out an Invoice for $500 but the customer returned some of the goods worth $100 and requested a credit of $100 to his account. Hence the net amount customer is going to pay you should be for $400.

I. Preparing A Credit Note

1. Create a blank new invoice as usual or create a new invoice from the original invoice of $500.

2. Enter the items that were returned but put a negative value for the quantities returned instead. If there are no items or quantities involved , simply enter a negative unit price or amount of $100. Basically your invoice total should be -$100 .

3. Click the Options button of the Invoice then change the Display name to “Credit Note” or “Credit Memo” according to your preference.

4. Preview, print and send this Credit Note to your customer.

Together these 2 invoices give a net invoice amount of $400 as required in your records.

II. Knocking Off Payments

Customer now pays you $400 but you have one invoice for $500 and another for -$100.

1. Click the [Payments] button on the tool bar and select “New Payment”

2. Select the customer name in the “Pay Invoice” form. Instant Invoice will display all outstanding invoices including the one for $500 and the credit note for -$100.

3. Double click the invoice for $500 applying a payment of $500. Then double click the credit note for $-100 paying it in full too. Click [OK] to accept and close the form.

Together these 2 payment entries give a net payment of $400 according to what you received but also knocking off the 2 invoices so it doesn’t appear in your outstanding invoice and statement reports.