---
title: Issuing Credit Memos and Refunds in QuickBooks
description: "There are times when you have to issue a payment to a customer QuickBooks provides forms that allow that transfer of funds: credit memos and refunds. "
image: https://blog.tarabyte.com/hubfs/thumbnail_large-19.jpg
---

[![TaraByte 239 x 120 ](https://blog.tarabyte.com/hs-fs/hubfs/TaraByte%20239%20x%20120%20.png?width=239&name=TaraByte%20239%20x%20120%20.png)](https://www.tarabyte.com/)

- About ⌄ 
    - [Our Story](https://www.tarabyte.com/about-us/)
    - [Services](https://www.tarabyte.com/our-services/)
- Fishbowl ⌄ 
    - [About Fishbowl Inventory](https://www.tarabyte.com/fishbowl-inventory/)
    - [Fishbowl Accounting Basics For QuickBooks](https://info.tarabyte.com/fishbowl-accounting-basics-for-quickbooks-desktop-quickbooks-online)
    - [Advance Fishbowl Chart of Accounts Guide](https://info.tarabyte.com/advance-fishbowl-chart-of-accounts-guide)
    - [Custom Fishbowl Reports](https://www.tarabyte.com/fishbowl-inventory/custom-fishbowl-reports/)
    - [Controller's Toolbox](https://tarabyte.com/fishbowl-inventory/fishbowl-accounting-controllers-toolbox/)
    - [Custom Programming](https://www.tarabyte.com/fishbowl-inventory/custom-fishbowl-programming/)
    - [3PL Integration](https://www.tarabyte.com/fishbowl-inventory/3pl-integration/)
    - [CRM Integration](https://tarabyte.com/fishbowl-inventory/fishbowl-crm-integrations/)
    - [E-commerce Integration](https://www.tarabyte.com/fishbowl-inventory/ecommerce-integrations/)
    - [POS Integration](https://www.tarabyte.com/fishbowl-inventory/pos-integration/)
    - [QuoteWerks Integration](https://www.tarabyte.com/fishbowl-inventory/quotewerks-integrations/)
- [QuickBooks ⌄](https://tarabyte.com/about-quickbooks-software/) 
    - [Data File Services](https://www.tarabyte.com/quickbooks-data-services/)
- Community ⌄ 
    - [FAQ](https://www.tarabyte.com/faq/)
    - [Events & News](https://www.tarabyte.com/events/)
- [Blog ⌄](https://blog.tarabyte.com/blog) 
    - [Fishbowl Inventory](https://blog.tarabyte.com/blog/tag/fishbowl-inventory)
    - [QuickBooks](https://blog.tarabyte.com/blog/tag/quickbooks)
    - [Video Tutorials](https://tarabyte.com/tarabyte-videos/)
- [Shop ⌄](https://www.tarabyte.com/shop/) 
    - [Fishbowl Inventory ⌄](https://www.tarabyte.com/product-category/fishbowl/) 
          - [Controller's Toolbox](https://tarabyte.com/product/controllers-toolbox/)
          - [The Sales and Margins Report](https://tarabyte.com/product/the-sales-and-margins-report/)
          - [QuickBooks Ship-To Export Utility](https://tarabyte.com/product/quickbooks-ship-to-export-utility/)
    - [QuickBooks Software](https://www.tarabyte.com/product-category/quickbooks/)
- [Contact Us ⌄](https://www.tarabyte.com/contact/) 
    - [Upload Files](https://www.tarabyte.com/upload-files/)

[Home](https://www.tarabyte.com) > Blog

<https://www.twitter.com/TaraByteSol>

<https://www.facebook.com/TaraByteSolutions>

<https://www.linkedin.com/in/jeannemillertarazevits>

<https://www.youtube.com/channel/UCcr6G9YJfcwqLhnsW3hkOUA>

- About ⌄ 
    - [Our Story](https://www.tarabyte.com/about-us/)
    - [Services](https://www.tarabyte.com/our-services/)
- Fishbowl ⌄ 
    - [About Fishbowl Inventory](https://www.tarabyte.com/fishbowl-inventory/)
    - [Fishbowl Accounting Basics For QuickBooks](https://info.tarabyte.com/fishbowl-accounting-basics-for-quickbooks-desktop-quickbooks-online)
    - [Advance Fishbowl Chart of Accounts Guide](https://info.tarabyte.com/advance-fishbowl-chart-of-accounts-guide)
    - [Custom Fishbowl Reports](https://www.tarabyte.com/fishbowl-inventory/custom-fishbowl-reports/)
    - [Controller's Toolbox](https://tarabyte.com/fishbowl-inventory/fishbowl-accounting-controllers-toolbox/)
    - [Custom Programming](https://www.tarabyte.com/fishbowl-inventory/custom-fishbowl-programming/)
    - [3PL Integration](https://www.tarabyte.com/fishbowl-inventory/3pl-integration/)
    - [CRM Integration](https://tarabyte.com/fishbowl-inventory/fishbowl-crm-integrations/)
    - [E-commerce Integration](https://www.tarabyte.com/fishbowl-inventory/ecommerce-integrations/)
    - [POS Integration](https://www.tarabyte.com/fishbowl-inventory/pos-integration/)
    - [QuoteWerks Integration](https://www.tarabyte.com/fishbowl-inventory/quotewerks-integrations/)
- [QuickBooks ⌄](https://tarabyte.com/about-quickbooks-software/) 
    - [Data File Services](https://www.tarabyte.com/quickbooks-data-services/)
- Community ⌄ 
    - [FAQ](https://www.tarabyte.com/faq/)
    - [Events & News](https://www.tarabyte.com/events/)
- [Blog ⌄](https://blog.tarabyte.com/blog) 
    - [Fishbowl Inventory](https://blog.tarabyte.com/blog/tag/fishbowl-inventory)
    - [QuickBooks](https://blog.tarabyte.com/blog/tag/quickbooks)
    - [Video Tutorials](https://tarabyte.com/tarabyte-videos/)
- [Shop ⌄](https://www.tarabyte.com/shop/) 
    - [Fishbowl Inventory ⌄](https://www.tarabyte.com/product-category/fishbowl/) 
          - [Controller's Toolbox](https://tarabyte.com/product/controllers-toolbox/)
          - [The Sales and Margins Report](https://tarabyte.com/product/the-sales-and-margins-report/)
          - [QuickBooks Ship-To Export Utility](https://tarabyte.com/product/quickbooks-ship-to-export-utility/)
    - [QuickBooks Software](https://www.tarabyte.com/product-category/quickbooks/)
- [Contact Us ⌄](https://www.tarabyte.com/contact/) 
    - [Upload Files](https://www.tarabyte.com/upload-files/)

# Issuing Credit Memos and Refunds in QuickBooks

[June 11, 2019](https://blog.tarabyte.com/blog/archive/2026/) by [Jeanne](https://blog.tarabyte.com/blog/author/jeanne) in category [Accounting](https://blog.tarabyte.com/blog/tag/accounting), [QuickBooks](https://blog.tarabyte.com/blog/tag/quickbooks) with <https://blog.tarabyte.com/blog/issuing-credit-memos-and-refunds-in-quickbooks#comments-listing>

[Home](https://www.tarabyte.com) > [Blog](https://blog.tarabyte.com/blog) > Issuing Credit Memos and Refunds in QuickBooks

<https://www.twitter.com/TaraByteSol>

<https://www.facebook.com/TaraByteSolutions>

<https://www.linkedin.com/in/jeannemillertarazevits>

<https://www.youtube.com/channel/UCcr6G9YJfcwqLhnsW3hkOUA>

#### You're accustomed to money going in a certain direction, but sometimes you have to pay your customers.

There are times when you have to issue a payment to a customer QuickBooks provides forms that allow that transfer of funds: credit memos and refunds. 

#### **Credit Memos**

A credit memo is just what it sounds like. A customer returns an item for which they’ve already paid, and you have to credit him or her for its cost. This is the more complicated of the two and requires more bookkeeping, since you’re tracking the sale, its payment, and the return item. You can deal with the amount of the credit by:

- Retaining the funds in the customer account.
- Issuing a refund.
- Applying it to the next open invoice.

![](https://blog.tarabyte.com/hs-fs/hubfs/Imported_Blog_Media/Issuing-Credit-Memos-and-Refunds.jpg?width=668&height=350&name=Issuing-Credit-Memos-and-Refunds.jpg)

*When you issue a credit memo to a customer, you have three options for returning the money they paid.*

To create a credit memo, click  **Refunds & Credits** on QuickBooks’ home page or open the  **Customers **menu and select  **Create Credit Memos/Refunds**. The  **Credit Memo **window opens. Select the correct  **Customer:Job**. In the line item section of the form, choose the merchandise returned in the  **Item** column and enter a quantity. Repeat the process if more than one item was returned, then click  **Save & Close**. The  **Available Credit **window, pictured above, will open. Click the button in front of the option you want.

 

Select the first option if that’s what you want and click  **OK.** The window will close, and the customer will have had that credit amount applied to his or her own account. You can see this in the  **Customer Center **if you click on  **Customers** in the navigation toolbar (or  **Customers | Customer Center**). You can then either click on the  **Customers & Jobs **tab and scroll down until you can highlight your customer’s record or click on  **Transactions | Credit Memos**.

 

Click on **Give a Refund **to open the **Issue a Refund **window. Everything should be filled in here except for the payment method. If you select **Cash** from the **Issue this refund via **drop-down list and then pick the correct account from the list that opens, the refund amount will be subtracted from the account. Select **Check** and then the **Account**, and check the box in front of **To be printed**. That refund will be in the list the next time you open the **File **menu, then **Print Forms | Checks**. Choose a credit card and check the box in front of **Process credit card refund when saving **box to issue a credit card refund automatically.

![](https://blog.tarabyte.com/hs-fs/hubfs/Imported_Blog_Media/Issue-a-refund.jpg?width=726&height=190&name=Issue-a-refund.jpg)

*The **Issue a Refund **window* there is an open invoice, the **Apply Credit to Invoices **window will open, containing a list of unpaid bills. If there isn’t already a checkmark in front of the invoice you want to apply it too, click in the first column to create one. QuickBooks will tell you how much credit was applied and whether any remains. When you’ve checked the screen for accuracy, click **Done**.

#### **Dealing with Overpayments **

Let’s say a customer is catching up on multiple outstanding invoices and he or she sends you a check for the total but overpays you. Open the **Receive Payments **window by going to **Customers | Receive Payments **or clicking **Receive Payments **on the home page. Select the customer and enter the **Payment Amount **and **Check #**. QuickBooks will have put a checkmark in front of all the outstanding invoices listed to indicate they’ve been paid.

In the lower left corner, you’ll see a section titled **Overpayment**. The extra amount and your two options for dealing with it appear here. You can either credit the customer or issue a refund. Click the action you want to take, then save the transaction.

![](https://blog.tarabyte.com/hs-fs/hubfs/Imported_Blog_Media/Overpayment.jpg?width=328&height=181&name=Overpayment.jpg)

*If a customer overpays you, you can use QuickBooks’ built-in tools to credit him or her.*

 

You can also issue refunds through the  **Write Checks **window, but this is a more complicated procedure. It’s easier to process a credit memo.

 

If you’re at all unclear about what we’ve described here, please contact us for assistance. Refunds or credits that come through incorrectly (or not at all) can make customers very unhappy and may affect future sales. So, let us help you get it right the first time.

 

![Untitled design (1)](https://blog.tarabyte.com/hubfs/Untitled%20design%20(1).png "Untitled design (1)")

### **Jeanne Tarazevits** **CPA, QuickBooks Maven, Fishbowl Guru**

As a Top 100 QuickBooks ProAdvisor and Fishbowl Inventory Super Hero, Jeanne helps businesses change the way they do business by getting their inventory management, accounting and manufacturing systems all working together seamlessly. In providing these services Jeanne draws upon her knowledge as a CPA, her previous experience as an Auditor with Ernst & Young and long-time CFO of a publicly-traded medical device manufacturer, and the expertise gained in the 10+ years she has been working with Fishbowl Inventory.

#### Related Posts

### Recent Posts

### Posts by Tag

- [Fishbowl Inventory (33)](https://blog.tarabyte.com/blog/tag/fishbowl-inventory)
- [QuickBooks (29)](https://blog.tarabyte.com/blog/tag/quickbooks)
- [Inventory Management (14)](https://blog.tarabyte.com/blog/tag/inventory-management)
- [Accounting (11)](https://blog.tarabyte.com/blog/tag/accounting)
- [Our Partners (4)](https://blog.tarabyte.com/blog/tag/our-partners)
- [QuickBooks Online (2)](https://blog.tarabyte.com/blog/tag/quickbooks-online)
- [netstock (2)](https://blog.tarabyte.com/blog/tag/netstock)
- [Food Manufacturing (1)](https://blog.tarabyte.com/blog/tag/food-manufacturing)
- [Payable (1)](https://blog.tarabyte.com/blog/tag/payable)
- [Payables (1)](https://blog.tarabyte.com/blog/tag/payables)
- [Purchase Orders (1)](https://blog.tarabyte.com/blog/tag/purchase-orders)
- [Uncategorized (1)](https://blog.tarabyte.com/blog/tag/uncategorized)

See all

[![New Call-to-action](https://hubspot-no-cache-na2-prod.s3.amazonaws.com/cta/default/5606425/15e03d41-fea1-404a-b70e-3b0b87f5bdce.png)](https://hubspot-cta-redirect-na2-prod.s3.amazonaws.com/cta/redirect/5606425/15e03d41-fea1-404a-b70e-3b0b87f5bdce)

![TaraByte-Logo-Wht](https://blog.tarabyte.com/hs-fs/hubfs/TaraByte-Logo-Wht.png?width=250&height=43&name=TaraByte-Logo-Wht.png)

TaraByte Solutions has been providing expert QuickBooks consulting and accounting services to small and mid-market firms since 2001. Our focus is the selection, sale and implementation of inventory solutions. Join the many retail, wholesale, manufacturing and e-commerce businesses that count on us for scalable best-of-breed applications.

#### Contact Us

**Toll Free North America:** (888) 745-1533  
**Worldwide:** (949) 645-1019

---

**Email **: [info@tarabyte.com](mailto:info@tarabyte.com)

---

****Monday - Friday: 9:00 am - 5:00 pm****

---

**Saturday - Sunday: Closed**