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In QuickBooks Pro 2010 Essential Training, author Bonnie Biafore shows how to most efficiently use this popular business accounting software to manage business finances. The course covers core QuickBooks features that business owners need to know, from recording typical bookkeeping transactions like bills and invoices, to reconciling accounts and managing company files. Exercise files accompany the course.
If a customer complains about an order or sends products back, you can either issue a credit to the customer toward their next order, or refund their money. To record a customer credit in QuickBooks, you create what's called a code memo. Once you do, you can apply that credit to a future invoice to reduce what the customer has to pay or you can issue a refund check. To get started, on the homepage click Refunds & Credits. The Create Credit Memos/ Refunds window should look familiar.
It looks almost exactly like the Create Invoices window. And if you look carefully, you will notice that QuickBooks assigns the next invoice number as the credit memo number. In the Customer:Job dropdown list, choose the customer you are giving the credit or refund to, Condo Coop in this example. Choose the Date in the Date box if it isn't the one you want already. Like when you create an invoice, you fill in lines in the table for what you are giving credit for. For example, if you are giving credit for services or products you sold, you fill in the item in the Quantity but as positive numbers.
For example, this refund is going to refund Brushed Nickel Door Knobs, 3 of them. QuickBooks fills in the description and the rate from the item record and calculates the amount of the credit. It also calculates the sales tax to refund too. If you want to record a memo to yourself about the credit, fill in the Memo field. Then when you are done, click Save & Close to save the memo and close the dialog box.
The Available Credit dialog box opens with three options for handling a credit. To keep the credit around to use later, leave the Retain as an available credit option as it is. This is a good choice if you don't have an open invoice for the customer, and the customer hasn't asked for a refund check. If you want to write a refund check, you can do that right away by selecting Give a refund and then clicking OK. The Issue a Refund dialog box opens.
QuickBooks has all the fields filled in so you can click OK to print the check. If you want to change the date, the payment method or the account, do that before clicking OK. If you decide to write a refund check later, open the Create Credit Memos/Refunds window later on. Go back to the credit memo. In the toolbar, click the icon of a dollar bill with a hand above it. The Available Credit dialog box opens again.
If you have an open invoice for the customer, you can apply the credit to that invoice. Select Apply to an invoice to open the Apply Credit to Invoices dialog box. Suppose you do not have an open invoice so you keep the credit around to apply to an invoice later on. When you are ready to apply the credit, you don't have to do that in the Create Invoices window. You actually use the Receive Payments command. If you think about it, applying a credit to an invoice is like the customer sending you a payment.
On the homepage, click Receive Payments. Choose the customer with the credit in the Received From dropdown menu. Select the invoice that you want to apply the credit to by clicking anywhere in the invoice line except the first column. Clicking the checkmark column selects the invoice for a real payment. Then click Discount & Credits. In the Discount & Credits dialog box, QuickBooks automatically applies the credit.
Click Done to get back to the Received Payments window. You will see the Credits column in the table with the credit applied. Click Save & Close to save the invoice with the credit applied. There is one other way to apply a credit to a new invoice you create. So create a new invoice for the customer and add some items to it. When you do, the Apply Credits button comes to life.
To add a credit, click Apply Credits. Click Yes to record the transaction before continuing. The Apply Credits dialog box opens, which looks a lot like the Discount & Credits dialog box. Turn on the checkmark for the credit and click Done. You will see the credit applied to the invoice and the balance reduced by that amount. Click Save & Close to save the invoice.
The easiest way to handle credits is to apply them to an invoice right away or to write a refund check. But you can keep credits in place and apply them whenever the customer asks you to.
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