Overview
A Credit Memo lets you give a customer a credit on their account without processing a cash refund. Once issued, the credit sits on the customer's account as Available Credit and can be applied to any open invoice — in full or in part.
You can create a credit memo directly from a customer's account page or from an individual invoice. Either way, the customer's balance and any connected invoices update automatically.
When to Use Credit Memos
A customer was overcharged on an invoice and you want to reduce what they owe without issuing a refund.
A customer requests a discount or goodwill credit for a future job.
Work was partially completed and you need to adjust the invoice amount.
A customer prefers store credit over a cash refund.
Understanding Account Balance & Available Credit
On any customer's account page, you'll see two balance figures:
Open Balance — the total amount the customer currently owes across all unpaid invoices, minus any payments or credits already applied.
Available Credit — the total value of credit memos that have been issued but not yet applied to an invoice.
Clicking on Available Credit opens the full list of credit memos on the account, so you can quickly see what's open and what's been applied.
Create a Credit Memo from a Customer Account
Go to Accounts and open the customer's profile.
Select the Credit Memos tab on the account overview page.
Click + New Credit Memo.
Fill in the credit memo details:
Reason — a short note explaining why the credit is being issued (e.g., "Overcharge on Invoice #1042").
Line Items — add labor or material line items if you want to specify exactly what the credit covers. This is optional but useful for tax accuracy.
Tax & Discount — adjust as needed.
Internal Note — a private note visible only to your team.
Billing Address — pre-filled from the customer account; update if needed.
Click Save. The credit memo is added to the customer's account and their Available Credit increases immediately.
Create a Credit Memo from an Invoice
Open the invoice you want to issue a credit against.
Click the More Actions menu (three-dot icon) on the invoice page.
Select Create Credit Memo. The credit memo form will open with line items and settings pre-filled from the invoice.
Adjust the line items, amount, and reason as needed. The total must be a positive number.
Click Save. The credit is added to the customer's Available Credit balance.
Apply a Credit Memo to an Invoice
You can apply a credit memo to an open invoice from two places — from the credit memo itself, or directly from the invoice.
From the Credit Memo
Open the credit memo from the customer's Credit Memos tab.
Click Apply to Invoices. A modal opens listing all eligible open invoices for that account (Draft, Pending, or Partially Paid).
Select the invoices you want to apply the credit to, and enter the amount to apply to each one.
Click Apply. Each selected invoice balance updates, and the credit memo's remaining balance decreases accordingly.
From an Invoice
Open the invoice. If the customer has any available credit, a banner will appear at the top of the invoice preview indicating that credits are available.
Click the banner or the Apply Credits button. A modal opens showing all open credit memos for that account.
Select which credit memos to apply and enter the amount for each.
Click Apply. The invoice balance updates and a Credits Applied line appears in the invoice transaction log.
Voiding a Credit Memo
If a credit memo was issued by mistake or is no longer needed, you can void it.
Open the credit memo from the customer's Credit Memos tab.
Click Void from the actions menu.
Confirm the action.
Voiding a credit memo automatically removes it from any invoices it was applied to. Those invoices return to their previous balance, and the credit is no longer available on the account.
Similarly, if an invoice with applied credits is voided, the credits are released back to the customer's Available Credit balance.
QuickBooks Online Sync
Credit memos sync automatically to QuickBooks Online when your account is connected. This includes:
Creation of a matching credit memo in QBO linked to the same customer.
Application of the credit to the corresponding invoice in QBO.
Real-time balance updates so your QBO customer balance matches MotionOps.
If a sync fails (for example, due to a closed accounting period), you'll see an error message with the reason and steps to resolve it. You can retry the sync or fix the issue manually in QBO.
Tips & Best Practices
Always add a reason. A clear reason helps your team understand the credit when reviewing account history, and it appears in the sync log for QBO.
Use line items when taxes matter. If the original invoice had taxable items, recreating those line items on the credit memo ensures the tax adjustment is accurate in your reports and in QBO.
Apply credits before sending invoices. If a customer has Available Credit, apply it before sending the invoice so they see the correct amount due from the start.
Partial credits are fine. You don't have to apply the full credit memo to a single invoice. Split it across multiple open invoices as needed.
Things to Know
A credit memo's status is Open while it has a remaining balance, and Closed once fully applied.
You cannot edit a credit memo that has been partially applied. If changes are needed, void it and create a new one.
Credits cannot be applied to invoices that are already Paid or Voided.
You cannot apply a credit amount that exceeds the invoice's open balance.
Credit memos are only available on the Web App.
Access is permission-controlled. If you don't see the Credit Memos tab or the option to create one, contact your account admin to check your permissions.
Troubleshooting
I don't see the Credit Memos tab on the account page.
You may not have the required permission to view credit memos. Contact your account admin to verify your access level.
The "Apply Credits" banner isn't showing on an invoice.
The banner only appears when the customer has open (unapplied) credit memos. Check the Credit Memos tab on the customer's account to confirm there's available credit.
I can't apply a credit to an invoice.
Credits can only be applied to invoices with a status of Draft, Pending, or Partially Paid. Fully paid and voided invoices are not eligible.
The credit memo didn't sync to QuickBooks Online.
Check the sync error log for the specific reason. Common causes include a closed accounting period in QBO or a missing customer match. Resolve the issue in QBO and retry the sync from MotionOps.
Have questions? Reach out via the support chat or email support@motionops.com.