If a customer has an approved credit memo with an open balance and they want cash instead of keeping the credit on their account, you can convert that credit balance to a refund directly from the credit memo detail page. This guide walks through that process.
If you are issuing a refund because a customer overpaid on a specific payment, see How to Issue a Refund from an Overpayment.
Before You Start
The credit memo must meet two conditions before the Issue Refund option will appear:
The memo must be marked as Approved
The memo must have an open balance greater than zero
If the credit memo is unapproved or has already been fully applied, the refund option will not be available. Contact your administrator if a memo needs to be approved before proceeding.
Steps
1. Go to Credit Memos. Click Credit Memos in the left sidebar.
2. Find the customer and open the credit memo. Click the Credits by Account tab, then click the customer name. Their credit memo list will open. Click the credit memo you want to convert to a refund.
đ¸ Screenshot suggestion: The Credit Memo detail page showing the memo details (type, issue date, amount, balance) and the Issue Refund banner visible below, indicating the memo is approved and has an open balance.
3. Click Issue Refund on the notice. On the credit memo detail page, a notice will appear showing the open balance and offering an Issue Refund option. Click Issue Refund. The modal opens pre-filled with the customer name, the source (Credit Memo), the source reference number, the open balance amount, and Check as the default method.
4. Review and complete the refund details.
Confirm or update the following fields:
Method â Defaults to Check. Update if sending via ACH, wire, or another method
On â The date of the refund
Chk Num â The check number, if issuing by check
Mailed On â The date the check was or will be mailed
Comments â Any notes about why the credit is being refunded rather than applied
đ¸ Screenshot suggestion: The Issue Refund modal showing the pre-filled Customer, source (Credit Memo), source reference number, and Amount fields.
5. Add refund items (optional). Use the Add Item button in the Refund Items table to document what the refund covers at the line-item level. This is particularly useful if the credit memo covered multiple products or services and you want the refund record to reflect the same breakdown.
â ď¸ Warning: If the Amount field and the Refund Items total do not match when you submit, the system will ask which figure to use. When coming from a credit memo, the Amount field â which reflects the credit memo's open balance â is typically the correct figure.
6. Click Issue Refund. Click the Issue Refund button. The refund is created with a status of Issued and you are taken to the Refunds tab where the new record is visible.
After Issuing
The refund will appear in the Refunds register showing the Credit Memo as the source and the original CM number as the source reference. The Pending Refunds KPI count on the Receivables page will reflect the new refund.
When the check clears the bank, see How to Mark a Refund as Cleared.