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If you show as reconciled or cleared, your QBO cash balance will be reduced thus not matching your bank statement. How do you remove the invoice which was paid via a credit, from the bank register. The bank statement does not reflect the payment since the check was applied and reconciled in the prior month. To create a statement for one customer, open the dropdown in the Action column and select Create statement 3. That invoice shows up in the bank register as a payment eventhough it was from a prior credit. Next month, the credit is applied to the customers new invoice. When the bank statement is received you reconcile based on the checks deposited (which includes the $500 payment). Then, recreate and apply it to the appropriate invoice. After that, locate and delete the credit memo for the bad debts. A bank deposit is created (+New, Bank Deposit) with all the checks amounts and deposited into the bank. Go to the Automation section and toggle the radio button to off if the Automatically apply credit is enabled. The customer pays $500, which leads to a $100 credit. Following the same example, 4 invoices each of $100 have been issued. I saw this thread and have a question as to the impacts of the credit in the Bank Register and finally Reconciliation.
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I'd like to make sure this is taken care of. Keep me posted on how it goes or if you need additional help. I'm also adding this article to see various information on how you can refund the customer or record the overpayment as a tip-in QBO: Handle a customer credit or overpayment in QuickBooks Online. You can click this article to see detailed steps on how you can apply the available credit to customers' balances or open invoices: Create and apply credit memos or delayed credits in QuickBooks Online. Enter identifying information for the credit memo. From the Bills page, tick the Credit radio button. Next, create credit by going to: Vendors menu at the top. Mark the box next to Automatically use credits. Select Credit Memo from the menu that appears. Select the Bills menu from the left and then the Company Preferences tab. I've attached a screenshot below for visual reference: Click on the + New button in the new tab to create a new transaction. This way, it will automatically create a credit to the customer's profile that you can apply for future invoices. Step 1: From the left pane, choose Sales. Meanwhile, you can enter the full amount of $500 in the receive payment window and choose the four invoices that cost $100 each. Steps to Apply Credit Memos in QuickBooks Online. Since the customer pays you $500 and the invoices to be paid are only $400, there's no option to automatically issue a credit memo for $100 in QuickBooks Online. Once the customer overpays more than what was owed, you can enter a credit memo, refund the customer, or enter the overpayment as a tip in QuickBooks. I'll share details on how customer's credits or to handle overpayments in QuickBooks Online. Welcome back to the QuickBooks Community.