Invoice-Based Credit Memos

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Overview

An Invoice-based credit memo is applied to line items of a specified, qualifying invoice. A credit can be applied up to the total of the line item. Invoice-based credit memos take precedence over existing payments and credits, which are removed—if necessary—from any line item to which a credit memo is applied. The amount of the credit memo line determines the amount of the pre-existing transactions that are removed for that line.

Non-Qualifying Invoices for Invoice-Based Credit Memos

Invoices that would not qualify for invoice-based credit memos include:

invoices with refund-related reversals;
rebilled invoices;
voided invoices;
parent-pay child invoices;
invoices with no qualifying line items (i.e., only zero-dollar line items); and
pending invoices.

Note: You cannot void an invoice that has a credit memo associated with it. You must void all associated credit memos before voiding an invoice.

Create an Invoice-Based Credit Memo

Getting Here: Click Accounts > select an account > Payments & Credits > Credit Memos > New

Under Credit Type, select "Invoice-based."
Select an invoice to which you want to apply a credit memo. For larger accounts, you may wish to filter the invoices by choosing a specific plan via the "Select a Plan" drop-down menu:

The following types of invoices are not displayed on the list:
- Invoices that have any refund-related reversals
- Invoices that have already been rebilled
- Invoices that have already been voided
- Child invoices, when account hierarchies are used with the parent pay option
- Invoices with no lines upon which the credit memo can be applied
- Pending invoices
A list of line items on the invoice displays.
Select a Reason Code for the credit memo. This field is required. Note that only Reason Codes defined with a type of Credit Memo display in this drop-down menu. See Reason Codes for more information.
Enter a comment to explain the reason for issuing the credit memo. This field is required.
Enter the credit amount for each line item against which you want to issue a credit. This amount must be greater than 0. Note that the maximum amount equals the original line item amount minus any previously applied credits, including credit memos.
Notes:
- After you enter an amount, the client tax engine calculates the tax amount that must be credited. Entering the full amount of the line item may not result in a zero invoice balance due to tax calculations.
- The Maximum Credit Amount shown will be tax-inclusive for a tax-inclusive service.
Click the page icon to optionally add a comment for any line items.
Click Next to continue. The details for the credit memo display, including any credit for taxes.

Note: The Amount shown will be tax-inclusive for a tax-inclusive service.
Click Save to create the credit memo. Confirm that you want to save the credit memo. The credit memo displays on the Credit Memos tab for the account, and the credit memo lines display on the Transactions tab for the account.

You can click the Credit Memo Number to see the detail for the credit memo.
You can click Void to cancel the credit memo. The credit memo is removed from the invoice and displays as Voided on the Credit Memo page and the voided credit memo lines display on the Transactions tab for the account. If you void a credit memo, the entire credit memo is voided. You cannot void individual lines on a credit memo.
You cannot void a credit memo if it is applied to an invoice when the invoice is rebilled.