Credit Memo Overview

A credit memo in Contractors Cloud reduces what a customer owes without changing the original invoice. Use one when work was returned, adjusted, or cancelled, when you're correcting a billing error, or when you're extending goodwill credit. A credit memo is built from the same line items as an invoice, belongs to a project's contract, and is applied against one of that customer's invoices to lower its Balance Due — or held as open credit, or turned into a refund when money actually goes back to the customer. Credit memos reduce the project's revenue, appear alongside invoices and payments in the transaction ledger, and — when connected — flow to QuickBooks with the invoice application intact.

Quick start — create a credit memo

Open the invoice you're crediting and click Create Credit Memo. (Or, from the project's Transactions tab, choose New Transaction → Credit Memo — you'll pick the contract first.)
Enter the Credit memo # and the Credit Memo Date, then click Save and add lines.
Add the credit lines: use Add item, or Import items to pull in the invoice's lines and keep only what you're crediting. The credit memo's total is the sum of its lines plus tax.
Check Apply to which invoice? — it's set automatically when you started from an invoice. This is the invoice whose balance the credit reduces.
Close the dialog. If QuickBooks sync is on, the close button reads Sync & Close and pushes the credit memo to QuickBooks on the way out.

Where credit memos appear

Invoice — the invoice summary's Total Credit Memos row expands to list each credit memo applied to that invoice; a Credit Memo Tax row shows the tax portion when there is one.
Project — the contract's Transactions tab lists credit memos in the ledger with a negative amount and a note showing which invoice each is applied to; the summary table has a Credit Memos column.
Credit Memo Report — the company-wide list on the Accounting dashboard. Filter by rep, project status, class, lead source, dates, and QuickBooks state; the Amount column totals across everything the filters match. Access is permission-controlled.
Credit memo totals also roll into the Profit & Loss, WIP, and Sales Rep reports.

The Credit Memo dialog

Credit memos open in one dialog whether you're creating, viewing, or editing. A contract must be selected before the rest of the form appears — every credit memo belongs to a project's contract. The fields:

Credit memo # — required. Credit memos share the invoice numbering sequence, so the next number follows your invoices.
Credit Memo Rep — the user credited with (responsible for) the credit memo.
Class — shown when class tracking is enabled; carries to QuickBooks.
Unprinted Memo — an internal note; it is not printed.
PO # and Credit Memo Date — the date is required before the credit memo can sync to QuickBooks.
Apply to which invoice? — the invoice this credit reduces (see below).

Below the details, the dialog carries the line items, Project Contacts, a QuickBooks section, Project Notes, and a Utilities section with Delete and Copy. Copy duplicates the credit memo, with options for what status the copied items start in.

Line items

Credit memo lines use the same editor as invoice lines — the same item catalog, quantities, rates, amounts, and tax handling, with a Subtotal and Tax rate at the bottom. Every line counts toward the credit memo's total regardless of its item status. Where status does matter is QuickBooks: only lines set to Billable and marked for sync are exported — and lines brought in with Import items start as Pending, so set them to Billable if the credit memo should sync in full.

Applying a credit memo

A credit memo applies to one invoice, chosen in Apply to which invoice?. Applying it reduces that invoice's Balance Due by the credit amount including its tax. If you pick No invoice, the credit memo is open credit — it still reduces the project's revenue, but no specific invoice's balance changes until you apply it.

Refunds — when money goes back to the customer

A credit memo lowers what's owed; a Refund records money actually returned. To refund a credit memo: from the project's Transactions tab choose New Transaction → Refund, enter the Amount to refund, and check the credit memo(s) being refunded in the list. Saving records the refund and marks those credit memos as consumed — a refunded credit memo has no remaining credit to apply. Refunds appear in the transaction ledger and the Payment / Refund Report. To undo one, delete the refund itself; that releases the credit memo.

QuickBooks

With QuickBooks Online connected and credit memo sync enabled, Contractors Cloud exports credit memos to QuickBooks as credit memos on the same customer job, line by line. The invoice application syncs too: QuickBooks shows the credit applied against the invoice, keeping both systems' balances in step. If your company uses two-way credit memo sync, credit memos entered or changed in QuickBooks Online also flow back into Contractors Cloud. With QuickBooks Desktop, credit memos export one direction only: Contractors Cloud → Desktop.

Export happens with Sync & Close on the dialog's close button (shown to QuickBooks admins when the credit memo has a date), with Close without syncing beside it.
Only Billable lines marked for sync export, and every item on the credit memo must already exist in QuickBooks — one unmatched item holds back the whole document.
If QuickBooks Online is set to apply credits automatically, Contractors Cloud lets QuickBooks decide where the credit lands and adopts the result back.
Deleting a credit memo in Contractors Cloud never deletes it in QuickBooks — remove it there yourself if it shouldn't exist.

Permissions

Creating, editing, and deleting credit memos are three separate user permissions, so you can allow staff to issue credits without letting them remove them. Users with the Executive, Invoice Edit, or Contract Approval permission can also edit credit memos. QuickBooks actions require the QuickBooks admin permission, and the Credit Memo Report is granted per user in report permissions.

Troubleshooting

"The credit isn't showing on the invoice."
The credit memo isn't applied to that invoice. Open the credit memo and pick the invoice under Apply to which invoice? — until then it's open credit and reduces project revenue only.

"There's no Create Credit Memo button on the invoice."
Either the invoice is still a Sales Order (it has no invoice date), or your user account lacks the create-credit-memo permission. Ask an administrator.

"The credit memo isn't in QuickBooks."
Check, in order: your company's credit memo sync setting is on; the credit memo has a Credit Memo Date; its lines are Billable and marked for sync (imported lines start as Pending); every item on it already exists in QuickBooks. Then push it with Sync & Close (QuickBooks admin required).

"The customer wants money back, not a credit."
Create a Refund (Transactions tab → New Transaction → Refund) and check this credit memo in it — that records the outgoing money and consumes the credit.

"I deleted a credit memo but it's still in QuickBooks."
That's by design — Contractors Cloud never deletes records out of your QuickBooks. Delete the credit memo in QuickBooks manually.