This guidance shows you how to create a credit note for a fully paid invoice, this can be used if your customer returns something to you but you don’t provide refunds for example. This credit note can then be applied to a future invoice.
Creating the Credit Note
To start, go to Sales > Select the fully paid invoice > Click the Refund button at the bottom. On the next page, select the second option Create a credit note for this invoice > Don’t add a payment to the credit note – I haven’t yet paid the refund. When ready, click the Refund button. You’ll be taken to your newly created credit note that lists all your line items as a negative.
Using on Future Invoices
Unpaid invoices for this customer will then have an Apply Advanced Payment button within the payment details section of their invoice. Using the dropdown box, select the credit note that you have created and click the Apply Advanced Payment button. The customer’s credit will then be applied. You can repeat this process over on subsequent invoices over until all the customer’s credit is used up.