⚠️ Please note: To use credit memos, you must bill out of Financial Cents.
Better control how you handle overpayments by clients via credit memos. With credit memos, you can:
Add a credit to a client's account
Apply that credit to future or existing invoices
Choose to auto-apply or manually apply credits
Creating Credit Memos
To create a credit memo, do the following:
Go to Clients > Dashboard
Locate the client who you'd like to issue a credit to, and click on their name to open their profile
Click on the Billing tab
Scroll down to the Credits section and click Add credit memo
Input the relevant information for the credit memo:
Amount (Required): This is the amount you wish to credit to the client
Service Item (Required for QuickBooks Online Sync): Specify which Service Item the credit memo should apply to.
Add internal note: An optional note you can provide to your team members
Auto apply credit memo to invoices: Toggle this option on if you want to automatically apply the credit to any outstanding or overdue invoice (both existing and future). If you want to control which invoice the credit is applied to, leave this option toggled off. ❗Please note: The selection of this option is NOT editable after creation. More info here.
Once ready, click Create credit memo.
You can also create credit memos directly from an invoice. To do so, do the following:
Scroll down to the bottom of the Edit Invoice or Create Invoice form
Click Add credit
In the window that appears, click Create credit memo
Input the needed information and click Create credit memo. The created credit memo will automatically be applied to the invoice (but can be removed by clicking the red "X" next to Credits).
Applying Credit Memos
Applying Automatically
If you selected to auto apply the credit memo, then Financial Cents will look for the oldest open invoice and apply the maximum available amount to that invoice. We'll keep repeating this process until the credit memo has been completely consumed or there are no more open invoices to apply it to.
For example, suppose you have the following invoices on a client's account:
Invoice 1:
Invoice Date: 12 Feb 2025
Amount: $150
Invoice 2:
Invoice Date: 4 Apr 2025
Amount: $250
If you create a credit memo of $200 and enable the option to auto apply, we'll first apply the memo to Invoice 1 since it has the oldest invoice date. We'll then take the remaining $50 and apply that towards Invoice 2 so that the amount due on Invoice 2 is $200. At this point, the credit memo status will be "Closed" since it has no more remaining balance.
If you instead create a credit memo of $500, we would again apply the credit to Invoice 1 first, then Invoice 2. This would leave a remaining balance on the memo of $100. The next time an invoice is opened on the client's account, we'll automatically apply the $100 towards that invoice.
Applying Manually
To manually apply a credit memo to an invoice, do the following:
Navigate to the Edit Invoice or Create Invoice page
Scroll down to the bottom of the form and locate the Credits field
Click Add credit
Check off the credits that you wish to apply to the invoice
Click Add credit balance to invoice
Once ready to debit the credit invoice, click to send the invoice to the client. ❗Please note: We won't debit the credit memo until the invoice has actually been sent.
After applying the memo, if the Amount due is $0, then the invoice is considered settled via credit. At this point, you can choose to notify your client of the closed invoice or not.
If the Amount due is not $0, then your client will see the amount remaining on their invoice once they go to make a payment.
Editing Credit Memos
Open credit memos can be modified in the following ways:
Increase or decrease the credit amount
Modify the internal note
Change the selected Service Item
Once a credit memo has been closed, it can no longer be modified. Additionally, if an amount has already been applied towards an invoice, the credit memo cannot be reduced past that amount.
To edit a credit memo, do the following:
Locate the credit memo on the Billing tab of the Client Details page
Click the ellipses icon and then Edit credit memo
Select if you'd wish to add an additional amount via Credit OR take off a specific via Debit
Input the amount to change by under Amount. The new balance on the credit memo will display in the top right
Checking the Activity of a Credit Memo
If you need to track the application of a credit memo, you can do so via the Credit Memo section on the Billing tab of the Client Details page. In particular, click on the credit memo ID or click the ellipses menu then Show details to see a breakdown of how the credit memo was applied and/or modified.
Syncing Credit Memos to QuickBooks Online
⚠️ Please note: The credit memo sync between QuickBooks Online and Financial Cents is one-way. Any credit memos created and/or modified in QuickBooks Online will not appear in Financial Cents.
In order for a credit memo to sync to QuickBooks Online, the following must be true:
The client must be linked to a client in QuickBooks Online
The Service Item on the credit memo must be synced to QuickBooks Online
The invoice(s) that the credit memo was applied to must be synced to QuickBooks Online
The credit memo must be completely consumed OR be manually synced from the Client Details > Billing > Credit Memos section
If the above has been completed, then credit memos will sync over to QuickBooks Online.