How to Create Credits

Sometimes project costs are less than estimated, items get returned or clients change their mind. If you find yourself in this situation, you can create a credit, which means your client will have remaining funds available to use on the project.

You can create a credit on an invoice, proposal or estimate that has already been marked as paid.

Please Note: You can't create a credit on an issued invoice; to do this, you will need to void the invoice and duplicate to create a new version for editing.

Create a Credit

To create a credit, you must be on a document that is already marked as paid. Once in the relevant paid document, you have multiple options for creating a negative balance that can then be converted into a credit on the project. Let's look at each option:

Return an Item

On paid invoices, if you need to return an item and credit the exact amount back to the client, you can use the three dots icon on the right of the line item to open the menu and select Return Item.

This will automatically create a line item directly below the original, with negative amounts for any applicable cost, markup, shipping etc. You will also see (returned) in the title of the new line item, denoting that the item was returned.

Duplicate and Edit Item

Another option to create a credit is to duplicate a line item and edit the cost details to show a credit. To do so, use the three dots icon on the right of the line item to open the menu and select Duplicate.

You will see an exact duplicate of the line item directly below. On this new line item you can edit the title and/or description to note the reason, such as "Changed Mind", "Return" or "Price Adjustment". Then update any applicable price details, including cost, markup or shipping, using a negative amount. You will see the negative balance in the total at the bottom of the document.

Add New Line Item

To input a credit that is not directly related to another item, you can add a new line item. To do so, type in the title and/or description to let the the client know what the credit is for. This could be for a referral credit or promotional credit, for example. Make sure you input a negative number for the cost and ensure you adjust your markup, taxes or shipping costs accordingly. Once entered, you will see a negative balance on the document that includes the credit from the new line item.

Remove Item

You can also remove an item from a paid document to create a credit for the amount of the removed item. However, using this method will make it difficult to account for the specific source (i.e. product or service) of the credit should you need to reference it later on. To remove an item, use the three dots icon on the right of the line item to open the menu, then select Remove. The item will no longer appear on the document and you will see a negative balance that includes the cost of said item.

Convert Negative Balance to Credit

Once you have a negative balance on a paid document, you can turn it into a credit. Here's how:

Estimates/Proposals: In the Total section of your estimate or proposal, click Create Credit beneath the negative Balance Due.

A pop-up will appear asking you confirm you want to create a credit for the amount shown. Click Create to confirm.

Invoices: You can create credits on invoices two different ways, depending on whether or not you are ready to issue the invoice. If you are ready to issue the invoice, which will lock the document from further edits, click on Actions in the top right and click Issue Invoice.

This action will give this invoice a sequential number and will document it for tax and accounting purposes. Once issued, a credit for the negative balance will be created and will be available for use on the project.

If you are not ready to issue the invoice but want to create a credit, click Create Credit beneath the negative Balance Due in the Total section of your invoice. A pop-up will appear asking you to confirm you want to create a credit for the amount shown. Click Create to confirm.

Apply a Credit

Once you have created a credit, you can apply it as payment towards other documents. Simply select Apply Credit from the payment type dropdown when logging a payment. You will see the available credit below. If the available credit is more than the payment being logged, the payment amount will be deducted from the credit and anything left will be available to apply to future payments.

If the available credit is less than the payment amount, the available credit will be applied and a new payment will be scheduled for the remainder of the balance due, so that you can use an additional payment method.

View Project Credits

To see any credits for a specific project, go back to the overview page of the project and click Retainers and Credits in the left-hand menu. Click on the Credits tab at the top, and you'll be able to see the total available credit balance as well as any credits you've created. Hover over the information icon to see the original document and payment reference for an individual credit. You can see which documents a credit was applied to in the Applied On column.

Create a Credit from Invoices with Applied Retainer Payments

If a paid invoice has an applied retainer payment on it, and you attempt to create a credit by reducing the money value of the invoice itself, the difference in value will first be returned to the original retainer payments. Any leftover funds that you'd like to credit that do not come from applied retainer payments will be found as a separate credit in the project.

For example: 

• You have a £1,000 invoice and applied retainer payment for the full payment amount of £1,000 to that invoice.
• When you attempt to create a credit for a returned item in the amount of £500, that £500 will be returned to the original retainer payment and you should see the balance of this retainer increase by £500 in the Credits/Retainers tab in your project. You will not find this £500 as a separate credit in the project itself. 
• You will also see the applied payment recorded on the invoice itself reduce in value accordingly.