# How to Create a Credit Memo and Apply It to an Invoice in QuickBooks Desktop

> Create a credit memo in QuickBooks Desktop, apply it to an open invoice or refund it, and unapply a credit that went on the wrong invoice.

- URL: https://logistify.ai/guides/quickbooks-desktop/create-apply-credit-memos/
- Section: QuickBooks Desktop Guides, Receivables
- Applies to: QuickBooks Desktop Enterprise, Premier, Pro, Accountant
- Steps checked against: Intuit's QuickBooks Desktop help articles, updated August 2026
- Updated: 2026-10-18

**Short answer:** In QuickBooks Desktop, create the credit at Customers > Create Credit Memos/Refunds, then choose Apply to an invoice in the Available Credit window that opens. Pick the invoice in Apply Credit to Invoices and select Done. The same window also lets you keep the credit for later or give a refund. To unapply a credit, open the invoice, select Apply Credits, and clear it under Previously Applied Credits. This works in Pro, Premier, Enterprise and Accountant.

## Before you start

- Know why the credit is owed: a return, a price correction or a goodwill credit. Put the reason in the memo.
- Credit the same items that were on the original invoice, so the credit lands in the same income accounts.
- Ask the customer whether they want the credit applied to an invoice, held for later, or refunded.
- For a card refund through QuickBooks Payments, sign in to QuickBooks Payments from QuickBooks Desktop first.

## Step 1: Create the credit memo

1. Go to Customers > Create Credit Memos/Refunds.
2. In the Customer:Job dropdown, choose the customer.
3. Enter each item you're crediting, with its quantity and amount.
4. Add a memo with the reason, such as the return or the invoice number.
5. Select Save & Close. The Available Credit window opens.

## Step 2: Choose what happens to the credit

- Retain as an available credit: the credit sits in Accounts Receivable as a negative amount. You'll see it the next time you open Receive Payments for that customer.
- Give a refund: you pay the customer back by cash, check or card.
- Apply to an invoice: the Apply Credit to Invoices window opens, so you can pick the invoice.

## Step 3: Apply the credit to an invoice

1. In the Available Credit window, select Apply to an invoice, then OK.
2. In Apply Credit to Invoices, check the invoice the credit should reduce.
3. Select Done.

### Apply a credit you kept for later

1. Go to Customers > Receive Payments and choose the customer in Received From.
2. Select the invoice, then select Discounts and Credits.
3. On the Credits tab, check the credit you want to use and select Done.
4. If QuickBooks asks you to confirm the transfer, select Yes.
5. Select Save & Close.

You can also start from the invoice. Open it, select Apply Credits, and check the credit under Available Credits.

## Step 4: Refund the credit

1. In the Available Credit window, select Give a refund, then OK.
2. In the Issue a Refund window, choose how to pay in Issue this refund via.
3. For cash or a check, choose the account the money comes from.
4. For a card refund through QuickBooks Payments, choose the card type and select Process credit card refund.
5. Select OK.

## How to unapply a credit memo

1. Open the invoice the credit was applied to.
2. Press Ctrl+H to show its transaction history and confirm the credit memo is there.
3. On the invoice, select Apply Credits.
4. In Previously Applied Credits, clear the checkmark next to the credit.
5. Select Done in the Apply Credits window, then Save & Close on the invoice.

The invoice goes back to its full open balance, and the credit is free to apply elsewhere. If it went on the wrong invoice, apply it to the right one with Step 3.

## Edge cases

- A card payment that hasn't settled: with QuickBooks Payments, voiding is usually better than refunding. Intuit notes refunds cost more in fees and take days to reach the customer.
- Card refunds through QuickBooks Payments must go to the original card, within 6 months, for no more than the amount processed.
- Voiding a card refund: if it hasn't settled, open the credit memo or refund from the Customer Center, select View Refund receipt, then Void Refund.
- A small leftover credit you'll never use: Intuit suggests an invoice with an Other Charge item for the amount, then applying the credit to it. Agree the account with your accountant.

## Where QuickBooks Desktop leaves the work to you

- Someone has to decide each credit: why it's owed, how much, and whether to apply, hold or refund it.
- Held credits sit in Accounts Receivable until someone applies them in Receive Payments or Apply Credits.
- Many credit memos start as a short payment. Working out why the customer paid less is up to your team.
- A credit applied to the wrong invoice stays there until someone notices and unapplies it.

## How Logistify helps around credits

Logistify doesn't create credit memos or issue refunds. The [Accounts Receivable Service](https://logistify.ai/agents/accounts-receivable/) matches customer payments in the bank file to the open invoices they pay and records them in QuickBooks Desktop as Receive Payments. Short payments and overpayments, which often end in a credit memo, are left for your team.

For the payment side, see how to [receive payments and apply them to invoices](https://logistify.ai/guides/quickbooks-desktop/receive-payments-apply-to-invoices/).

## Frequently Asked Questions

### What's the difference between a credit memo and a refund in QuickBooks Desktop?

A credit memo records what you owe the customer. A refund pays it back, and you create it from the credit memo by choosing Give a refund.

### How do I apply an existing credit memo to an invoice?

Go to Customers > Receive Payments, choose the customer and the invoice, and select Discounts and Credits. Check the credit on the Credits tab and select Done.

### How do I unapply a credit memo in QuickBooks Desktop?

Open the invoice, select Apply Credits, and clear the credit under Previously Applied Credits. Select Done, then save the invoice.

### Can I void a credit card refund?

Yes, if you used QuickBooks Payments and the refund hasn't settled. Open it from the Customer Center, select View Refund receipt, then Void Refund.

## Sources

- [Intuit: Give your customer a credit or refund in QuickBooks Desktop for Windows](https://quickbooks.intuit.com/learn-support/en-us/help-article/customer-refunds-credits/give-customer-credit-refund-quickbooks-desktop/L9vZiXsKB_US_en_US)
- [Intuit: Remove or unapply a Credit from an invoice or bill in QuickBooks Desktop](https://quickbooks.intuit.com/learn-support/en-us/help-article/vendor-credits/remove-unapply-credit-invoice-bill/L3YQ7vox6_US_en_US)
- [Intuit: Void or refund customer payments in QuickBooks Desktop](https://quickbooks.intuit.com/learn-support/en-us/help-article/payments-account/void-refund-customer-payments-quickbooks-desktop/L8tjAWYcB_US_en_US)
- [Intuit: Write off customer and vendor balances](https://quickbooks.intuit.com/learn-support/en-us/help-article/vendor-management/write-customer-vendor-balances/L738xKfuq_US_en_US)
- [Intuit: Resolve common issues when applying a payment towards an invoice](https://quickbooks.intuit.com/learn-support/en-us/help-article/accounting-bookkeeping/resolve-common-issues-applying-payment-towards/L2UMXN8tt_US_en_US)