Easy Tech TutsHow to Create a Credit Memo in QuickBooks Online Easily 2026
By Impran M N
Credit memos are essential for issuing refunds or adjusting invoices when a customer returns a product or was overcharged, and getting them right keeps your accounting records accurate. This guide walks through creating a credit memo in QuickBooks Online for common billing scenarios.
01Navigate to the credit memo feature
Open the QuickBooks Online interface and locate the option to create a new credit memo.
02Select the customer and related invoice
Choose the customer account and, if applicable, the original invoice the credit relates to.
03Enter the credit details
Add the products, services, or amounts being credited back, matching them to the reason for the adjustment.
04Review the credit memo for accuracy
Confirm the amounts and customer details are correct before finalizing the memo.
05Apply or issue the credit
Save the credit memo and apply it to an existing balance or issue it as a refund, depending on the situation.
Frequently asked questions
What's the difference between a credit memo and a refund in QuickBooks?
A credit memo reduces what a customer owes or creates a credit on their account, while a refund typically involves returning money directly, though the two can work together depending on the scenario.
Can a credit memo be applied to a future invoice?
Yes, once created, a credit memo can be applied to reduce the balance on a future invoice for the same customer.
What are common reasons for issuing a credit memo?
Common reasons include product returns, service corrections, or billing adjustments after an invoice has already been sent.
Does creating a credit memo affect my financial reports?
Yes, credit memos are reflected in your accounting records and can affect revenue and receivables reporting.
Watch the full walkthrough
The same steps, demonstrated on screen from start to finish.
