Jaclyn Anku, ProAdvisor Training & Certification Leader: On today's episode of In the Know, we'll explore how to create credit memos from invoices with ProAdvisor and trainer Carla Caldwell. The training she'll present is an excerpt from this year's Recertification training. In case you missed it, the window to recertify is open from April 28 to June 30. To learn more about recertification, check the link in the description below.
So, with that, let me turn it over to Carla.
Carla Caldwell: Hi, I'm Carla. Previously, when we had to write off an invoice or a bill, we sometimes had to do it by creating a credit memo, or in this case of the bills, we did a vendor credit and had to do those from scratch, entering in all the details of what was happening to create that credit. Well, we can still do this if we want to, but now we have a second option.
We can create the credit memo for a customer or a vendor credit for a bill, and it could be done with all of the contents of that original transaction on it.
So let's start out by taking a look at how this works on a bill. I'm going to open up a bill here. I'm going to pull up Norton Lumber and Building Supply. Now, if you do like I did when I was practicing, if you click on that, it opens the vendor—so don't do that. Just click on the transaction portion and it will open up the bill for you. Now, this particular bill, for whatever reason, maybe there was an issue with the product that was purchased or for whatever reason, there's going to be a credit. At this point this bill is not paid yet, or maybe there's a balance left on it.
In this case, it's just totally unpaid. When I select the More option, you're going to see that we can copy this to a vendor credit. Now one thing that I want to make mention of is that it doesn't matter who entered the bill. If you're putting in a credit memo, you are putting a vendor credit, so just copy to vendor credit.
Here we go. What you're going to see is that the entire bill has been copied over to the credit memo with all the details. Now it could be that you don't get a full credit for this; it's a partial or there's other details that you want to adjust, and you are welcome to do that because it is fully editable. Once you've made your specific adjustments you needed to make, then you simply save and close.
Now, as you would imagine, this is simply putting a credit on the vendor’s account. If we want to connect the vendor's bill and that credit memo, simply select this transaction, and you could go over to the Action column, or you can just open it up, but I'm going to mark it as paid. Once you mark it as paid, it is creating a bill payment. What it is doing is matching or connecting that bill and that vendor credit. That bill will now have a balance of zero and that vendor credit will no longer be open either. I'm going to go ahead and save and close. Now, once I've done that, you're going to see that that bill no longer shows up on the unpaid list here.
But let's go take a look at the vendor record and see exactly what this looks like, because I think it's pretty helpful to see the full view of what has happened on this transaction. I'm going to minimize that left navigation, and you're going to see that we have the bill and we have the vendor credit, and we have the connection of those two, the application of that credit to the bill. Now I personally like to go over to the little gear icon and select the balance that allows me to see that all of those have, in fact, a zero balance. So that is how we are going to be marking or connecting a vendor credit that's been automatically created from a bill to that bill, and we are good to go.
Let's go see what it looks like on the customer side. SoI'm going to go down to the invoices area in QuickBooks Online. And what we're going to see is that I am able to go and look at a customer. And here we are looking at Kookies by Kathy. We're going to go ahead and select this transaction and open up this invoice, just as we did before. And again, regardless of who entered that invoice, I am able to go ahead and open up that invoice, and if I select the More button, I'm expecting to see the ability to create that vendor credit. However, I'm in the old invoice layout.
We are going to update the layout for the new layout. So, if you are in the old layout, select the More button, and don't see the ability to create that credit, you need to make sure that you are upgrading to the latest layout. Again, just to give us a little real estate here—I'm not going to take a tour right now—I'm going to just go down to the More Actions and create a credit memo. When I do this, as it did on the vendor side, we are going to see that that credit memo has been filled in based on what was on that original invoice. You can edit this as needed. I am going to go ahead and not edit it. Just go ahead and save this.
Notice that we are able to send it. We are able to send out this credit memo to that customer. So if you need to do that, feel free to do it. But I'm just going to save it because I don't have anybody to send it to. In our sample company here, you're going to see it because I have turned on a setting in my settings area to automatically apply credits. It has already applied that credit. It is no longer listed as an open invoice as before.
Let's go take a look really quickly at that customer's record so we can see exactly what this looks like. I'm just going to scroll down and there is Kookies by Kathy, and when I take a look at this, you're going to see on that transaction list, again, just trying to get a little more real estate.
Here you can see the original invoice has now been marked as paid. The credit memo has been marked as applied. And about that connection of those two things, they even put in a wonderful memo here to let us know that it was created when we linked that credit to the invoice.
It is really handy for us to be able to have that, and while this update is kind of small, I think it's going to be pretty mighty, because now we don't have to worry about keying all of that stuff in at any time. The less data entry, the better. So hope you have fun creating some credit memos and some vendor credits. That's a wrap for this one.
Jaclyn Anku, ProAdvisor Training & Certification Leader: Thank you so much for the training, Carla and thank you for watching. Be sure to like, comment, and subscribe so you don't miss a single episode. We'll catch you next time.
