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xTuple for Service Businesses Demo Guide

  
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5.1. Applying Credits
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5.1. Applying Credits

To issue a customer credit, the first step is to generate a credit memo. Once created, credit memos can be used in one of two ways:

  • Apply credit memos to open invoices to reduce the amount of money a customer owes you.

  • Issue a refund check using the credit memo as the basis for the refund.

You can create and manage credit memos from the Receivables workbench. To create a credit memo, follow these steps:

  1. Go to Accounting > Accounts Receivable > Workbench.

  2. Specify All Customers or limit the view to the TTOYS customer.

  3. Select the Receivables tab.

  4. Click on the NEW button's drop-down menu.

  5. From the drop-down menu, select the Misc. Credit Memo option—not the Credit Memo option—as shown below:

Note

Miscellaneous Credit Memos are used for miscellaneous accounting purposes, whereas Credit Memos use the same line item structure as sales orders or invoices.

Creating a Miscellaneous Credit Memo

Once you select the Misc. Credit Memo option, you will be presented with the Misc. Credit Memo screen. For this scenario, let's assume we charged TTOYS too much on their recent invoice. So now we owe them a refund equal to five hours of our billable time. To fill out the Misc. Credit Memo with this information, follow these steps:

  1. Enter "TTOYS" in the Customer # field.

  2. Specify today's date as the document date then hit TAB to auto-calculate the due date based on the billing terms for the customer.

  3. In the Order # field enter the invoice number this credit memo cross references (optional).

  4. Enter a reason code.

    Tip

    If the reason code you need does not exist, select the Edit List option in the reason code drop-down menu to add a new reason code.

  5. Enter an amount for the credit memo (e.g., $1012.50).

  6. Finally, you can add any notes to complete the information, as shown below:

Entering a Misc. Credit Memo

Once the misc. credit memo has been filled out, there is only one final step:

  1. Select the POST button.

Now that we have a posted credit memo, we can either apply the credit to an invoice or create a refund check. It's likely your demo data doesn't have an open invoice to apply the misc. credit memo to, but that's ok. We'll use the misc. credit memo for a refund check.

Even though we won't be applying this particular credit memo, you can see in the following screenshot how you would apply a credit memo if you wanted to:

  1. Right-click on the credit memo.

  2. Select the Apply Credit Memo option:

Applying credit memos to customer balances
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5. Credits and Refunds Home 5.2. Issuing Refunds