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# Issue a credit memo

Use a credit memo when you shipped less than you invoiced, gave a later discount, or took goods back. It reduces what the customer owes.

||| A credit memo is not a customer payment. Cash does not move.

## Start from the invoice

1. Open **All pages** in the left sidebar, then click **Sales** and [**Invoices**](https://app.booksgpt.ai/go/invoices).
2. Open the invoice.
3. Click **More invoice actions**, then **Issue credit memo**.

![The More invoice actions menu with Issue credit memo](https://booksgpt.ai/help/invoices/more-menu-updated.png)

## Build the credit

The dialog is titled **Credit invoice** and the invoice number. You complete **1 · Build**, then **2 · Review books**.

1. Set the **Credit memo date**. It cannot be before the invoice date, and it must be in an open accounting period.
2. Type an **Internal reason for the credit**. Customers do not see it.
3. Under **Items to credit**, tick only the lines you are crediting and set the quantities. Each line keeps its name and its details note.
4. Leave **Apply available credit to this invoice** off unless this invoice's balance should drop now. Leftover credit stays with the customer. Apply it later from one of their open invoices.
5. Click **Review impact**.

If goods from a line can come back into stock, **Return credited items to stock** appears under it. Leave it off when the customer keeps the goods. For returns, including items sold at no charge, see [Return inventory with a credit memo](https://help.booksgpt.ai/en/article/return-inventory-with-a-credit-memo-1mk30bl/).

## Review, then issue

1. Read the totals.
2. Tick **I reviewed the revenue, tax, A/R, and customer-credit impact.**
3. Click **Issue credit memo**.

## Apply a credit later

If you left the credit unapplied:

1. Open an invoice this customer still owes.
2. Under **Credit memos**, click **Apply credit**.
3. In **Apply credit memo**, set the **Application date**, the **Amount to apply**, and a **Reason for application**. The date must be in an open accounting period, and it cannot be before the credit memo date.
4. Click **Review impact**, tick **I reviewed the accounting and customer balance impact.**, then **Apply credit**.

Applying the credit does not put money in the bank. It lowers the balance on the invoice you chose.

![An issued credit memo with Apply credit and Void](https://booksgpt.ai/help/credit-memo-invoice-guard/issued-memo-card.png)

## The invoice stays locked

While a credit memo issued against this invoice is still open:

- **Void invoice** and **Delete invoice** are unavailable in **More invoice actions**.
- **Correct amounts & dates** is unavailable in **Edit invoice**. **Revise details** stays.

![More invoice actions while a credit memo is issued, without Void invoice or Delete invoice](https://booksgpt.ai/help/credit-memo-invoice-guard/more-menu-while-issued.png)

![Edit invoice while a credit memo is issued, with Revise details only](https://booksgpt.ai/help/credit-memo-invoice-guard/edit-menu-while-issued.png)

Un-applying the credit puts the balance back on the invoice. To void, delete, or correct the invoice, void the credit memo first. BooksGPT says "Credit memo CM-1042-1 was issued against this invoice." Your memo's number is in that sentence.

If the credit was issued on a different invoice, un-apply it on this invoice first.

## Void the credit memo

**Void** appears when none of the credit is applied. If some of it covers an invoice, un-apply that amount first. The button reads **Un-apply** and the amount. If the card names another invoice, open that invoice and un-apply it there.

1. Under **Credit memos**, click **Void**.
2. Set the **Reversal date**. It cannot be before the credit memo date, and it must be in an open accounting period.
3. Type a **Reason for void**.
4. Click **Review impact**, tick **I reviewed the accounting and customer balance impact.**, then **Void credit memo**. A stock return says **Void stock return**.

The memo stays on the invoice, marked **Void**. That posts the opposite of the credit. If the memo had returned stock, that stock goes back out on the reversal date.

## Good to know

- With costing on, BooksGPT may refuse a date or change that would take stock out of order. The message offers a date that works, says what to undo first, or says to contact support. See [Sell inventory and post cost of goods sold](https://help.booksgpt.ai/en/article/sell-inventory-and-post-cost-of-goods-sold-19kvll5/).
- To record cash the customer sent, use **Record payment** on the invoice. See [Create, send, and get paid on an invoice](https://help.booksgpt.ai/en/article/create-send-and-get-paid-on-an-invoice-92ng65/).
- Customers cannot pay by card through BooksGPT. Collect the payment your usual way, then record it.
- Invoices imported from QuickBooks can take a credit memo here.