Account credit lets you hold a client's funds against their record before those funds are tied to a specific invoice. This is useful when a client overpays, pays in advance, or leaves a deposit. The credit stays on the client record until you apply it to an invoice or refund it, so you're not handing money back and re-collecting it later.
In this guide, we'll show you how to create account credit, view a client's credit balance, pay an invoice with credit, and refund credit. We'll also cover how to handle overpayments, underpayments, and write-offs.
Before you begin
Handling overpayments, underpayments, and write-offs
When a client pays more or less than the invoiced amount, how you resolve it depends on the situation.
Overpayment: When a client pays more than the invoice amount, the extra becomes account credit. Follow the steps in Create a credit below, then apply it to a future invoice using Pay for an invoice with account credit.
Underpayment: When a client pays less than the invoice amount, the invoice stays partially paid. Either follow up for the remaining balance, or clear the outstanding amount with a credit note.
Write-off: When you decide not to collect an outstanding balance, add a credit note to reduce the invoice to zero and mark it as paid. See Add a credit note for the steps.
How-to
Create a credit
Overpayment
You can add credit as an overpayment from an invoice, or create a payment without assigning it to an invoice.
Credit from payment
Enter a payment directly from the Payments page without adding it to an invoice to create a credit.
Regardless, the credit will show as a new payment.
Display account credit
The account credit is displayed on the client record.
Pay for an invoice with account credit
Click Pay, then Pay with credit and apply the credit amount.
Enter the credit amount and click apply. You can see which payments created this credit to ensure that you apply the correct credit.
Refund a credit
You can see the history of the credit by clicking view.
If the credit has been used to pay invoices, its history will show here.
You can make a partial or full refund on a credit by clicking on the payment page and clicking Refund credit.
Select the amount to refund, the refund date and then click refund.
