How do I return a customer credit balance?

Customer credit balances can come from unused prepayments, overpayments, and credit memos. Sometimes, you may want to pay that money to the customer via a check, and then mark the credit balance as having been used.

To accomplish this, in short:

1. Create a check for the amount not used.

2. Select Accounts Receivable and the Customer in the detail section of the Check (this creates an invoice for that customer that won’t show up in the invoice screen).

3. Create a Receivable for that customer and apply the prepayment to the created invoice

Now for the longer tutorial:

1.  Create a Check for that Customer.
   1. In the Banking Section of the toolbar, select Write Checks and then click Add.
   2. Enter the amount of the credit to refund, as well as selecting the payee type of “Customer” and selecting the customer ID.
   3. Select the Accounts Receivable code in the detail section of the check.
   4. Select the customer ID in the Name column for the Accounts Receivable line in the check detail.
   5. Type the amount of the refund again or double click the amount to copy it from the check header.
   6. Post the check – This creates an invoice for the customer which brings the customer balance in this case to zero. At this point, the invoice is still unpaid and the prepayment is still not applied. We will take care of that in our next step.
2.  Create a Receivable for the Customer and apply the balance of the prepayment to the unpaid invoice.
   1. Click on the Receive Payment button in the Accounts Receivable tab.
   2. Click on Add.
   3. Double click in the Payment area of the detail section to automatically fill in the remaining amounts or type them in by hand on the line for the customer credit as well as the invoice created in step one. The total payment received should now total to 0.
   4. Post the Receivable.

The customer credit has now been removed from their account, and you have a check that can be printed off and given to them.