Millward, May & Co - Wokingham Accountants
Wokingham Accountants

Quickbooks - Customer Credit

Customer Credit

If you issue a customer with a credit note and you offset it against an outstanding invoice from the same customer, follow the instructions below.


Create Bad Debt

Go to ‘Sales’/’Products and Services’

If under ‘Name’ you don’t have a ‘Bad debts’ in your list of services, click ‘New’/’Service’ an enter the following details:

  • Name: Bad debts

  • Income account: Bad debts

    • If this code doesn’t exist, scroll to the very top of the options and select ‘+ Add new’ & enter the following details:

      • Account type: Expenses

      • Detail Type: Bad debts

      • Name: Bad debts

      • Click ‘Save and Close’

  • Click ‘Save and close’


Create customer credit

Click on the '+' sign at the top right of your screen and under 'Customers' select 'Credit Note'.

Just like a sale, enter the customer name, date, account (post this to bad debts), amount & VAT (if applicable). The VAT amount should match the rate on the original invoice.

Click the green button at the bottom right of the screen: 'Save and close'.


Match credit against sale

If the credit note has been matched against the wrong sales invoice:

Click on ‘Sales’ on the left hand side, then ‘Customers’ & then under ‘Customer/Company’, select the relevant customer (e.g. Wickes).

Click on the Credit Note & click on the payment that should be highlighted blue at the top right of the screen & then the highlighted blue date.

Amend the ‘Payment’ column by adding the credit note value next to:

  • the invoice that you wish it to be offset against (found under ‘Outstanding Transactions’)

  • the credit note you are using (found under Credits’)

Once both have been added, the ‘Amount to Apply’ figure and the ‘Amount to Credit’ figure at the bottom of the screen should show as £0.00.

Click the green button at the bottom right of the screen: 'Save and close'.