How to Create a Credit Memo in QuickBooks?

create a credit memo in QuickBooks

In QuickBooks, a credit memo is a document that records a credit issued to a customer for a product or service that has been returned or for which they are being given a credit. It is essentially a negative invoice that reduces the customer's outstanding balance. 

When you create a credit memo in QuickBooks, you can apply it to an open invoice, which will reduce the amount owed by the customer. The credit memo will also update your accounts receivable balance, which is the amount of money owed to your business by your customers. 


Credit memos are useful in situations where a customer returns a product or cancels a service and is entitled to a refund or credit. By issuing a credit memo, you can keep track of these transactions and ensure that your customers are properly credited for the returned or canceled items.

Some Easy Steps for Creating Credit Memo in QuickBooks Desktop

To create a credit memo in QuickBooks, follow these steps:


  1. Open QuickBooks: Launch the QuickBooks application on your computer.

  2. Go to the Customers menu: Navigate to the top menu bar and click on "Customers" to access the Customers menu.

  3. Create Credit Memo/Refund: In the Customers menu, click on "Create Credit Memos/Refunds".

  4. Choose the customer: In the "Customer:Job" dropdown, select the customer for whom you'd like to create a credit memo.

  5. Enter the credit memo details: Fill in the required information, such as the date, credit memo number (if applicable), and any additional information needed for your specific situation.

  6. Add items or services: In the line items section, add the products or services you're issuing the credit memo for. Be sure to enter the correct quantities and rates, as this will determine the total credit amount.

  7. Apply tax (if applicable): If the items you're crediting are subject to sales tax, make sure to apply the correct tax rate. QuickBooks should automatically calculate the tax amount based on your tax settings.

  8. Enter a memo (optional): You can enter a memo or note in the "Memo" field. This can be helpful for providing additional context or explaining the reason for the credit memo.

  9. Save and close: Once you've entered all the required information, click on "Save & Close" to create the credit memo.

  10. Apply the credit memo (Optional): If you want to apply the credit memo to an existing invoice or give the customer a refund, follow these steps:

  11. Apply to an invoice: Go to the "Receive Payments" window, select the customer, and apply the credit memo to the appropriate invoice by checking the box next to the invoice and the credit memo.

  12. Issue a refund: In the "Create Credit Memos/Refunds" window, click on "Refund" at the top of the window. Choose the payment method, and fill out any additional required information. Click on "Save & Close" to issue the refund.


Now you have successfully created a credit memo in QuickBooks. Remember to review your accounts receivable and financial reports to ensure that your records are accurate and up-to-date. In this article, we have tried different strategies to create a credit memo in QuickBooks. If the error still pervades, you can avail guidance from our certified QuickBooks experts at the helpline at +1-800-615-2347.

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