How Do Credit Memos and Refunds Work in shopVOX?
This article should help you know the best use case for credit memos and refunds. Refunds in shopvox serve the purpose of representing actual money given back to a customer from a payment. Credit Memo's on the other hand are usually for internal use. They allow you to generate a formal statement/document that records a credit or adjustment that modifies that the balance of an invoice (only). Sometimes you'll need to refund and create a credit memo, other times you'll just do one or the other. Keep reading, I hope this helps!
About Credit Memos
A credit memo is a commercial document issued by You (the seller) to a customer (the buyer) or for internal purposes. You'll usually issue a Credit Memo to raise or lower the invoice balance. You may also use a credit memo in the event the order was cancelled or modified by you or the customer AFTER the Sales Order was converted to an Invoice (after the customer was invoiced). If there were payments added to an invoice, they can be issued back as a refund or held as a Credit for future orders.
Here are some situations to consider of when you might use Credit Memos:
- Your customer has already paid the full amount and you agree to give a credit to be used on future orders. In this scenario, create a credit memo and then record some sort of refund on the invoice.
- Customer made a partial payment, and an agreement was made to credit part of the order. In this scenario, create a credit memo for the credit amount. If done properly this credit memo will now show that the invoice balance owed is 0. This credit memo represents your company taking a hit/loss on the invoice, it also satisfies the remaining balance so it falls off the collections module.
- If the balance on an invoice shows negative this technically means you owe the customer, so you would issue a refund to fix this negative balance on the invoice.
- Some times customers make payments that are nominally short or over (+/- $1 depending on your currency). In these instances, credit memos allow you to correct/reconcile these discrepancies toward the invoice so that they are removed from your collection reports. They are a great way to get invoices to a zero balance.
How to Create a Credit Memo
In ShopVOX, you can ONLY create Credit Memo's from invoices (not sales orders or estimates)
On the selected Invoice:
- Click on the green Action button
- Click on Create CM
- Confirm what you will be crediting (select any line items you want on the CM)
- Click Save at the bottom of the screen to create the Credit Memo.
After you confirm and Save, a new transaction of the type "Credit Memo" is created with all the exact same line items (if you choose to do so), prices, sales commissions etc., on the Credit Memo. You can modify these, you can check/look at the balance on the invoice to see how the CM is calculating/effecting the big picture.
Once Credit Memos and Refunds are created, the Invoice should now be reconciled with Credits and Refunds to get to zero net balance on an Invoice.
You cannot create Credit Memos directly...they can only be created from an Invoice.
More ideas on how to :
- Create a credit memo with one or more line items of the existing Invoice
- Create a credit memo for the whole invoice
- Create a credit memo with a partial of a line item
- Create a credit memo with a totally different line item which does not exist on the original invoice
Credit Memos can sync to Quickbooks.
Refunds can be created from payments which are larger than the balance of the Sales Orders/Invoice (show as a negative number on the invoice). For instance, if your customer over paid you and you wanted to return the funds; you would then need to create a refund. The refund option is only available if there is an over payment or additional funds from the customers payment.
A Refund is created from the Payment screen, which can be accessed by choosing a customer.
- Click the Payments link
- Click Payment # in question