Credits are notes issued to clients indicating owed services to be provided at a future date to your clients. These include credit notes, prepayment and overpayment credits which are all consolidated into one single credit balance that can be applied as payments on future invoices.
Credit Notes are used for when you want to offer items or services to clients at a future date without receiving any form of payment first. Credit notes are often issued as gifts, loyalty rewards, or free offers to entice new customers to try out your items or services. They can also be used to provide store credit in lieu of refunding payments. Create a credit note with the below steps:
Select either:
The Dashboard section
Then select the Create New button
Select Credit
The Clients section
Then select a client
Select the Create New... button
Select Credit
On the Prepayment Credit screen, if a client isn’t selected, select Select a Client and choose a Client, or select + Create a Client to add a new client
Under Settings, select Credit Type and set it to Credit Note
Then select Currency to change the currency if needed and select Done to apply
Select Date of Issue to change the date if needed
To edit the Credit Number, select it and type the new number (up to 10 alphanumeric characters)
Next, select Add a Line and add items and/or services with their rate and quantity as needed
When finished, select Save to save the Credit, or select on Send... to email the credit to your client.
Note: A prepayment credit can also be converted into a credit note by editing it and changing the type in Settings.
Overpayment Credits
Overpayment Credits are created when a manual payment greater than the outstanding invoice total is entered by you. This automatically creates an overpayment credit associated with that client.
Select the Invoices section
Then select an Invoice that is associated with the client you want to create a credit for
Next, select the More Actions button
Select Add a Payment
Add the amount you want to overpay (if the invoice is still outstanding, add that to the total as well)
A pop-up will let you know how much in credit will be created for this client
Select Add Payment to finish. The overpayment credit will be added into the client's profile for future use on invoices.
Prepayment Credits
Prepayment Credits are used when your client voluntarily pays for the product or service ahead of time. If you’re looking to require payment upfront before starting work at a future date, you can use deposits instead. Create a prepayment credit with the below steps:
Select either:
The Dashboard section
Then select the Create New... button
Select Credit
The Clients section
Then select a client
Select the Create New… button
Select Credit
On the Prepayment Credit screen, if a client isn’t selected, select Select a Client, or select + Create a Client to add a new client
Under Settings, select Currency to change the currency if needed and select Done to apply
Select Date of Issue to change the date if needed
To edit the Credit Number, select it and type the new number (up to 10 alphanumeric characters)
Under Payment Method, select a method, otherwise it will default to Other when saved
Next, select Add a Line and add items and/or services with the rate and quantity as needed
When finished, select Save to create the credit, or select on Send… to email the Prepayment credit to your client.
View, Edit, and Delete Credits
Once credits are created, they are added to the client's credit balance as a pool of available credit to use on invoices regardless of the credit type. Credits can be viewed in each client’s profile in several places:
In viewing the list of clients, the credit column indicates any unused credits
In a client’s profile, the Available Credit area underneath the Outstanding Revenue graph indicates the remaining credit balance - hover over this to see a breakdown
In a client’s profile, the credits sub-tab will list all credits created for this client, regardless of the available credit balance or whether they’ve been applied as payments on invoices yet
Alternatively, you can run a Credit Balance report to get a summary of credits for all of your clients
To edit a credit, or reduce the client's credit balance, use the below steps:
Select the Clients section
Then select the client whose credit(s) you want to delete
Next, select the Credits sub-tab
Select the credit you want to edit
Then select the Edit button
Modify the credit as needed and select Save or Send… to finish.
Notes:
Credits can only be edited as long as the new amount does not cause the credit balance to go below zero (resulting in a negative balance); this can be used to reduce a Client's credit balance
If a particular credit has been used in full, it will not be editable
Only the amount can be edited for an overpayment credit
Delete Credits
Credits can only be deleted as long as it doesn't result in a negative balance. To delete a credit, use the below steps (note that once a credit is deleted, it cannot be undeleted):
Select the Clients section
Then select the client whose credit(s) you want to delete
Next, select the Credits sub-tab
Check the box(es) off next to the credit(s) you want to delete
Select the Bulk Actions button
Then select Delete
Confirm you want to proceed by selecting on the Delete Credit button and the credit will be removed.
Apply Credit as Payment
Apply Credit to Invoices
For individual invoices, you can either apply the credit while making the invoice, or after the invoice has been sent:
New Invoices
Select the Invoices section
Then select the New Invoice button to make a new invoice, or select an existing invoice and then the Edit button
Under the Total and Amount Paid section, if there is any available credit, Apply Credit ($xx.xx available) will appear, select this link
The full amount is populated by default, select inside the box to overwrite it with a different amount if needed, then select Apply
The Amount Due will reflect the new total after the credit has been applied
Continue editing the rest of your invoice as needed, then select Save or Send To... to finish.
Existing Invoices
Select the Invoices section
Then select an Invoice you want to pay with the client's credit balance
Next, select the More Actions button
Select Add a Payment
If there is credit available, it will automatically be selected for you
If the credit does not cover the full invoice total, you can make separate partial payments manually after using the full credit balance
Add Payment Notes if needed, and select Add Payment to finish.
Automatically Apply Credits to Recurring Templates
For any generated invoices from a recurring template or a retainer, credit can automatically be applied before recurring payments with the below steps:
Under Advanced Preferences, select Recurring Templates
Slide the toggle on next to Automatically Apply Credits to enable. The changes will save automatically.
All recurring templates and retainers that are sent automatically (not saved as a draft first) will now use any available credit for the client before sending the generated invoice, and before any recurring payments are processed.
FAQs
Why can’t I apply sales tax to my credits?
Sales tax can be added to credit notes only. Sales tax is only applied to an invoice when a product or service has been provided, and in the case of prepayment and overpayment credits, a service has not yet been provided, so sales tax is not applicable.
Why can't I see the Credit Number associated with a Credit payment on an Invoice?
Payments made from credits are taken from your client's credit balance overall, not from a specific credit note, prepayment credit or overpayment credit. If you need to reduce a client's credit balance, use the steps in Manage Credits above to edit any existing credit note, prepayment or overpayment credit down.
