So, if your customer overpays or prematurely send you funds, issuing delayed credits makes you and your customers even and keeps your books accurate. You just enter them as a line item and specify the date you want to apply credit. Typically, a refund involves returning payment for an incomplete service or defective product.įinally, you can issue delayed credits through your customers’ invoices, and they won’t apply until a future date. On the other hand, you issue refunds when a customer purchases goods or services from your business that do not meet their expectations. Put simply, it serves as an adjustment or correction of an already existing invoice. You should issue a credit memo when you bill a customer for goods and services, but then need to adjust the original invoice due to overpayment or incorrect information. How is a credit memo different from a refund or delayed credit? Preparing for tax season is difficult enough without having to decrypt old financial documents.
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