A billing credit, also known as a credit invoice or credit memo, is a way to detail a refund or credit to an invoice. For example, you may issue a billing credit if a customer asks for a refund, if you need to reclassify an invoice payment, or if you decide to give a customer a credit for any reason, like a promotional offer.
Before a billing credit can be added to an invoice, you need to create the credit on the Credits Dashboard. Canopy's Credits feature allows you to credit a client's account.
To learn how to apply a billing credit to an invoice, click here.
Heads Up! Applied credits are reflected in the Revenue by Client report for accurate financial tracking.
Create a Billing Credit
1. To get started, click Billing on the left primary navigation bar.
2. Choose Credits from the slide-in menu to open the Credits Dashboard.
3. Click Create credit.
4. Select a client using the Client Name box.
5. Select a Date.
The date will default to the current day.
6. Complete the credit information. Fields will be automatically filled according to your defined Service Item. Relevant fields include:
Service: Name of the credit.
Description: Description of the credit.
Quantity: Number of credits.
Rate: Amount to be credited.
7. Add a note to the Client Notes box.
8. Input any terms and conditions related to the credit.
9. Click Save credit.
The credit will be added to your Credits Dashboard.
How do I Reclassify an Invoice Payment as a Credit
There may be situations when you need to reclassify an invoice payment as a credit, such as correcting payment allocations or managing client credit balances.
Step-by-Step Reclassification Process
Refund the Payment: Refund the payment made on the invoice. This action will reset the invoice to its original balance owed.
Note: This refund action does not issue the actual funds back to the client but updates the invoice status. To issue the funds back to the client, go to the Payments tab, select the payment to refund, and select Refund Payment.
Create a Credit: Follow the steps outlined above to manually create a credit in the client's account.
Apply the Credit to Future Invoices: Navigate to the Credits Page, select the relevant credit, and apply it to an invoice as needed.
Managing Client Notifications
To avoid triggering a notification to the client when handling reclassification:
Instead of issuing a refund, manually create a credit for the client's account. This credit can then be directly applied to the invoice requiring payment adjustment. Since no refund is issued, the system may not send a notification.
System Limitations
Currently, Canopy does not offer a backend capability to directly move an invoice payment to a credit. The only available process is to refund the payment, create a credit manually, and apply it as necessary.
Reporting Implications
Credits applied to invoices are reflected in the Revenue by Client report. This allows you to track adjustments accurately within your financial reports, ensuring transparency and consistency in client-based revenue tracking.
Frequently Asked Questions
Does Refund Trigger a Notification? Depending on your system's settings, issuing a refund to reclassify payments may trigger an automated client notification. If avoiding notifications is a priority, the alternative is manual credit creation without processing a refund.
Do Credits Always Reflect in Reports? Yes, when applied, credits are visible in "Revenue by Client" and other financial tracking tools provided by Canopy.