There are a few different ways in which to issue a credit to a customer. In this article, we'll specifically be reviewing how to do so through the invoice page as well as best practices in regards to how credits should be issued. First off, please review this article to get a better understanding of how credits work in our system: Account Credits and Generic Credits
Let's get down to the basics of credits and how they work in regards to the invoice. First off, you'll notice a couple of options in regards to issuing a credit on the invoice. In order to issue a credit to a customer, you would just need to select "Give Credit" in the Actions section of the invoice. Let's check out the example below.
Selecting this button brings up a new menu to issue credit. You'll notice in the drop down that we have "Generic Credit" as the default option. Let's show you all my options I have:
You'll notice that I have a few options to choose from with one being the class. Let's go over both and what they do.
Generic Credits
"Generic Credit" is ASAP credit NOT CONNECTED to any invoice item. This means that the credit is not tied to any items on the invoice and acts as free monies from your organization to the customer. This is mainly used for a quick use issuance of credit to the customer. This means that the credit given does not have any G/L or other financial codes tied to it as it is free monies.
Credits from Invoice Items
The second option would be to choose the class item. What this does is allows me to issue credit from the class that is found on the invoice. This can be done for a multitude of reasons, such as a few sessions in the class being cancelled, a discount not applying, or any number reasons. However, issuing a credit from an invoice item should ONLY BE DONE if there is an actual payment on that item. What you are saying when issuing a credit from the invoice item is that you are now turning the payment into an ASAP credit to be used for future use. This is the same as how a store would work, where a customer is given store credit for future use.
YOU SHOULD NEVER ISSUE CREDIT FROM AN INVOICE ITEM IF NO PAYMENTS HAVE BEEN MADE ON THAT INVOICE ITEM.
If you are trying to do this, you are actually trying to issue a Generic Credit. Issuing a credit off an invoice item that has not been paid for will cause your financial reports to display information incorrectly as you are now creating incorrect revenue credited with no payments applied.
Credit allocations for invoice items
Once a credit has been issued, either from an invoice item or as a generic credit, it will show up under the Invoice Transaction Details section. In this scenario, I've went ahead and issued a $100 credit from the invoice item "California Guard License". You'll see that a "Credit Given" line has been generated in both these highlighted sections:
Let's review how this affects the allocations. If we select "Re-allocate Payments", we can see how this credit is affecting the invoice item. Here, you'll see the "CREDIT" option selected in the drop down as well as how much is being credited with the proper boxes updated:
Credit allocations for generic credits
If we were to issue this as a generic credit, there will be a few differences. I've reset the invoice and this time, issued a $100 generic credit. First, you'll notice that the "Credit Given" is missing from the invoice items section. This is due to the generic credit not affecting any invoice items. Since it has no affect to the invoice items itself, it will not display underneath there:
Also, if we go into the payment allocations page and select the same "CREDIT" drop down, we'll also see that the text box is blank as well as no reference to the credit on the invoice item. Since it is not tied to any invoice items, it will not display with it:
Issuing Credit through the Make Adjustment tool
The second method to issue a credit from an invoice item would be to use the Make Adjustment tool. This can only be done if the invoice has a payment on it and you would like to create a credit from that invoice item. This does not issue a generic credit as this is through the invoice item itself. First off, you would need to select the Make Adjustment tool.
As you can see, I have the class selected from the drop down. In this scenario, I want to issue a full $100 credit from the invoice item. However, any amount can be issued from it. Since this is a credit issuance and not an adjustment, the adjustment name and description field will not perform any actions so I will leave them blank. Let's go ahead and enter the full amount to adjust the item down to $0 and select Save:
After I close out this window, you'll see some familiar displays, with the "Credit Given" line displayed under the invoice items as well as a reference to the credit given under the Invoice Transaction Details.
