Background
You have the option of either creating a negative sale OR using the Credit Memo sales type.
Creating a Credit Memo
Item Credit Memos
To create a credit memo for an item sale (ie: an item return):
In the Sales command center open the Sales Register
Click the Returns & Credits tab at the top
In the lower right corner click on New Credit Memo
In the upper left area choose the customer
At the bottom of the window click the Layout button; select Item from the list
Indicate the number of items returned as a positive number
Click Record
Non-Item Credit Memos
Before you create a non-item credit memo you need to know which account you want to apply this credit memo against. Normally this would be an expense account. You can create this account by:
Go to the menu bar at the top of the screen and clicking "Lists"
Select Accounts from the drop down menu
Click the "New" button in the bottom left corner
Choose "Detail" in the upper left corner of the create account window
Pick a free Expense account number (6-XXXX) and hit tab
Enter an appropriate name (Bad Debt, Return, etc)
Click OK in the bottom right corner
To create memo for a non-item sale:
In the Sales command center open the Sales Register
Click the Returns & Credits tab at the top
In the lower right corner click on New Credit Memo
In the upper left area choose the customer
At the bottom of the window click Layout and choose Service
In the Description column, enter a description of the credit
Select the account you created above
Enter the credit amount as a positive value
Click Record
The credit is listed in the Returns & Credits area of the Sales Register
Apply a Credit Memo to a Sale
To apply a credit to a sale:
In the Sales Register, click the Returns & Credit tab
Select the credit memo and click ‘Apply to Invoice’
Apply the credit to any open invoices. You can apply the entire credit or only a part of the credit.
Note: If you use Categories the credit memo and the sale you are applying it to both have to fall under the same category.
Issue a Refund from a Credit Memo
To issue a refund from the credit memo:
In the Sales Register, click the Returns & Credit tab
Select the credit memo and click Pay Refund
Choose the correct bank account you want to pay out of in the upper left
Enter the proper date for the check and the check number
Record the check
Note: If you have multiple credit memos for one customer you can combine them so that you only have to cut one check. This article has instructions on how to cut one check from multiple credits.