Credit memos¶
A credit memo is credit a customer holds with you. It moves no money on its own — you issue it, and later apply it to reduce or clear an invoice. Voiding one cancels only the part nobody has used yet.
| Page | What it covers |
|---|---|
| Issue a credit memo | Creating credit against a customer, from an invoice |
| Apply a credit memo | Using it to reduce or clear what is owed |
| Email a credit memo | Sending it to the customer |
| Void a credit memo | Cancelling unused credit |
Credit memos sit alongside net terms, late fees and surcharging — see your account team if a screen described here is not available in your org.
Credit memo or refund?¶
A refund returns money to the customer's card or bank account. A credit memo does not — it records that you owe them value, to be used against a future payment. If the customer wants their money back, refund them instead.
Status¶
| Status | What it means |
|---|---|
| Draft | Legacy value. ChargeOn does not leave a credit memo here — every credit memo you issue through the app is Open the moment it is created |
| Open | Issued, with the full amount still available to apply |
| Partially Applied | Some of the amount has been applied; some is still available |
| Fully Applied | The whole amount has been applied. Nothing left to use |
| Written Off | Created by closing out an invoice as bad debt. Terminal — never reverts, even if the invoice's numbers change afterwards |
| Voided | The unused balance was cancelled. See void a credit memo for what this does and does not undo |
| Expired | Passed its expiry date before it was fully used, if your admin set one and scheduled the expiry job |
The order credit is applied in¶
When ChargeOn chooses which of a customer's credit memos to use — for example, sweeping available credit onto a recurring payment's next invoice automatically — it works through them in a fixed order:
- Soonest to expire first. A credit memo with an expiry date always goes before one without, and the nearer expiry date goes first.
- Then by the date the credit was issued, earliest first.
- Then by which one was created first, if the first two are tied.
The idea is that credit close to expiring gets used before it lapses. When you apply credit yourself — see apply a credit memo — the picker lists available credit in this same order, but you can choose any credit memo on the list, in any order and for any amount up to what is available.
Advance payments¶
Money a customer pays before there is an invoice to put it against — cash, a cheque, a wire, or a card charged up front — is recorded as an Advance Payment credit memo. It is not tied to any invoice at the moment it is created.
It does not apply itself to just any invoice
An advance payment credit does not sweep onto whatever invoice a customer happens to owe next. Someone applies it — see apply a credit memo — the same as any other credit memo, unless it sits against a recurring payment plan and Auto Apply on Recurring was switched on for it. Only then does it apply itself automatically, and only to that plan's own future cycle invoices as they are generated. Auto Apply on Recurring is off by default — you turn it on explicitly when you record or charge the advance payment.
See advance payments for how to record or charge one.