Apply Credit Memos to Different Categories or Customers

Credit (Debit) memos can only be applied to invoices of the same category, and to the same customer.

(Apply Payment / Credit (Debit) Memo Between Customers (Vendors) or Categories.)

Scenario A, Multiple Companies: You have a customer with two (or more) companies. The customer overpaid an invoice for one of the companies, resulting in a credit memo for that company. The customer would like to have the credit memo applied to an invoice of the other company owned by that customer.

Scenario B, Categories: You use two different categories to invoice a customer for different types of services or goods, or for different customer departments. The customer overpaid an invoice with one of the categories and would like to have the credit applied to an invoice with the other category. (You must have the Preference, Category Tracking, turned on to use this feature.)

Scenario C, 3rd-party (third-party): You have a customer who bought items (Customer A). And you have another customer who bought items and services (Customer B). Customer B is also a customer of Customer A. Customer B will pay its invoice to you, and will pay the invoice of Customer A to you.

Solution

After creating a backup of the company file

  1. Create a Liability, Credit Card account named Transfer Account
  2. From the Sales Register select the Returns and Credits tab
  3. Click once on the desired credit memo
  4. Select Pay Refund on the lower left of the window
  5. In the Account field of the Settle Returns and Credits window, select your newly created Transfer Account
  6. Select a Payment Method of Other
  7. In the Check # field, indicate something other than a check number, perhaps, TRNSFER
  8. Place a checkmark in the box for Check Already Printed
  9. Click Record
  10. In the Sales Register, select New Invoice to create a new credit memo, using the same customer name as in the open invoices
  11. For convenience, use a Service layout
  12. After entering the description, select your Transfer Account as the account
  13. Enter a negative value for the amount
  14. Indicate the correct category if applicable
  15. Select Record
  16. In the Returns and Credits tab of the Sales Register, click on the credit memo you just created
  17. Select Apply to Invoice
  18. Apply the credit to the desired open invoice