How to Create a Credit Memo in QuickBooks 2019

Watch QuickBooks 2019 video tutorial. Learn how to create credit memo and apply them to your bills. That way, you can show exactly how much you owe or if that bill is paid in full.

We are getting ready to wrap up module five where we’ve been talking about working with vendors. Before we wrap up this particular module, we need to talk a little bit about how to handle credit memos that your vendors will issue.

This has come to be section four. I want to show you how to create those credit memos in QuickBooks and apply them to your bills. That way you can show exactly how much you owe or if that bill is paid in full.

Let’s flip over to QuickBooks and I’ll show you how to handle credit memos.

If you remember we still owe Pelican Building Materials $25. Let me pull up the Unpaid Bills Detail report and you’ll see it right here. Pelican has issued us a credit memo for that so we’re going to enter it and then apply it to this particular bill so that we don’t owe them anything for this bill.

The way you’re going to create the credit memo is going back to the Home screen. Use your Enter Bills option, but this time choose the Credit option.

The first thing it asks is who is our vendor. We’re going to pick Pelican Building Materials. We need to put in the date of the credit that we were issued, a reference number, which would be on that credit, and then the amount of the credit.

I can actually break up that credit between the Expenses and Items tab again if I wanted to. But this time what we’re doing is we’re going to enter the credit for the framing. We had one of these and it was $25.

Make sure you put in the customer and the job, and also make sure if you’re using the class feature that you pick the class that you’d like this to go to. I’m going to hit Save & Close at the bottom. Now, that credit memo has been entered.

Now, let’s take a peek at the Unpaid Bills Detail report again. I want to show you that you’re only seeing the $25 that we owe on that bill and that’s because of our date.

Remember, I said in any report if you know something should be here and you don’t see it check your date. I’m going to go ahead and change this to January 31. Now, if I look at Pelican Building Materials, I see a credit and a bill.

Now, this is still not finished. Because, if these were applied to each other, they would not be on this report at all. Let’s go through and apply this credit to this bill.

The way to do that is back under the Home screen you want to go back to Pay Bills. If we go down and find Pelican Building Materials, you’ll see the $25 we owe. Also, you’ll see down here, it says there is one credit and it’s for $25.

In order to match these two together you’re going to hit Set Credits and if it saw an exact match it would check it automatically like it does here. So, all you have to do is make sure it’s checked and hit Done. Then that is it! You can go ahead and pay selected bills or cancel out of it. Because it’s already done at this particular time.

Right here, it’s asking if there’s something else we want to pay. Obviously, we’re done so we’re going to hit Done. Let’s go back and check out the Unpaid Bills Detail report again. We should not see Pelican Building Materials and we do not anywhere. That’s how I know that it’s paid.

That’s all there is to Working with Vendors. I’m going to go ahead and close this because we are going to now go over into module six and we’re going to change focus and talk a little bit about working with items and inventory.

I will see you shortly.

Cindy McGuckin

Cindy McGuckin is an IT trainer with over 20 years of experience. Cindy currently manages the IT Training Department at Trident Technical College, she's a Member of the Association of IT Professionals, Charleston, SC chapter and the Treasurer of the South Carolina Association of Continuing Higher Education.Cindy is a Microsoft Office and QuickBooks expert and her online courses have received hundreds of 5-star reviews. Her no-nonsense approach to teaching complicated topics makes her classes engaging and interesting.