How to Delete Available Credit in QuickBooks: Comprehensive Guide

Have you mistakenly applied credit to a customer account and now need to delete it? This guide will walk you through the process of deleting available credit in QuickBooks, ensuring your financial records remain accurate and up-to-date.

Understanding Available Credit in QuickBooks

Before diving into the deletion process, it’s important to understand what available credit means in QuickBooks:

• Credit Memo: QuickBooks uses Credit Memos to refund customers for products or services.
• Account Receivable: Applied credits appear in the account receivable register within customer centers.
• Impact: Credit memos increase the available credit in customer accounts.

Options for Managing Incorrect Credit

When you’ve applied credit incorrectly, you have two main options:

1. Delete: Completely remove the credit from the system.
2. Void: Reduce the credit memo in the customer’s account while retaining a record of the transaction for reference.

Detailed Steps to Delete Available Credit in QuickBooks

If you have mistakenly marked Credit to a Customer Account i.e., Statement, Invoice, or Bill, You can un apply, Remove or Delete the available credit by following below simple steps:

1. Removing Available Credit from Customer Statements

Follow these steps to delete credit from a customer statement:

Step 1. Open QuickBooks and navigate to Customers > Customer Centre from the top menu bar.

Step 2. Locate the customer’s name and open the associated Credit Memo.

Step 3. Now you Need to Go above the Customer’s Name and Click on the “Mark as Pending” icon.

Step 4. Once you Click on the “Mark as Pending” icon, there will be a Pending Non-posting Message below Credit Memo.

Step 5. Click “Save and Close,” then select “Yes” in the Recording Transaction Box.

This process removes the available credit from the customer statement without affecting your accounting records. You can mark it back to final when you have the appropriate invoice for applying the credit.

2. Deleting Available Credit from Invoices

For deleting the credit available from the invoice, you need to follow the below steps:

1. Access the Transaction History by pressing Ctrl + H.
2. Double-click the invoice from which you want to delete the available credit.
3. Click on “Apply Credits.”
4. In the “Previously Apply Credits” window, clear the selection for the credit.
5. Click “Done” in the Apply Credits window.
6. Select “Save and Close” on the invoice.

3. Deleting Available Credit from Bills

For vendor credits, follow these steps:

1. Locate the Vendor Credit in QuickBooks.
2. Select the Bill Radio Button and change the transaction type to Bill instead of Credit.
3. Click “Save and Close.“
4. When the Bill appears, change the transaction back to Credit by selecting the Credit Radio Button.
5. Click “Save & Close” again.
6. Confirm the transaction change when prompted.

Best Practices for Managing Credits in QuickBooks

To avoid future issues with credits:

• Double-check all credit applications before finalizing them.
• Regularly reconcile your accounts to catch any discrepancies early.
• Train staff on proper credit application procedures.
• Utilize QuickBooks’ built-in safeguards, such as user permissions, to limit who can apply credits.

Troubleshooting Common Credit Issues

If you encounter problems while deleting credits, try these solutions:

• Ensure you have the necessary permissions to modify financial transactions.
• Check if the credit is part of a closed accounting period, which may require reopening the period.
• Verify that the credit isn’t linked to other transactions that could prevent its deletion.

Impact of Deleting Credits on Financial Reports

Deleting credits can affect various financial reports:

• Accounts Receivable Aging: Removing credits may increase the amount owed by customers.
• Cash Flow Statements: Deleted credits could impact projected cash inflows.
• Balance Sheet: The assets section might show changes in accounts receivable.

Always review your financial reports after deleting credits to ensure accuracy.

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Frequently Asked Questions