Allocate credit to invoices or bills

If you create a new credit note for a customer or supplier or they have existing credit, you can use (allocate) that credit to invoices or bills. You can use credit from approved (Awaiting Payment) credit notes, and from prepayments and overpayments.

You can allocate additional credit to an invoice or bill that already has credit or payments applied. However, you can't enter a greater amount of credit than the outstanding balance.

How allocating credit works

  • You can allocate credit:
  • You can credit Awaiting Payment invoices or bills directly without using up existing credit.
  • If you allocate the full credit amount, the credit note status changes to Paid. Otherwise it stays as Awaiting Payment.
  • Credit is applied to the invoice or bill as at the credit note date, unless the credit note is older than the invoice or bill. In this case, it's applied on the invoice or bill date. This means that regardless of your user role, you can use a credit note from a locked period.
You can't credit draft or paid invoices or bills. There might be other ways to deal with those situations.

Allocate credit when approving an invoice or bill

  1. Find and open your draft or awaiting approval invoice or bill. Use search if you know the contact's name, or amount.
  2. Click Approve.

    If unallocated credit exists for the contact, you're prompted to allocate it.

  3. Click Allocate.
  4. Enter the amounts in the Amount to Credit fields for the unallocated credit notes, overpayment or prepayment you want to use. You can apply the full credit amount or just some of it.

    Image showing the Amount to Credit fields when allocating credit from an invoice.

  5. Click Allocate Credit.

Links to the credit notes, overpayment or prepayment show above the invoice or bill balance.

Allocate credit from an awaiting payment invoice or bill

  1. Find and open your draft or awaiting payment invoice or bill. Use search if you know the contact's name, or amount.

    If unallocated credit exists for the contact, a credit link shows above the payment panel.

    Image showing the Credit this invoice field.

  2. Click Credit this invoice or Credit this bill.
  3. Enter the amounts in the Amount to Credit fields for the unallocated credit note, overpayment or prepayment you want to use. You can apply the full credit amount or just some of it.

    Image showing the Amount to Credit fields when allocating credit from an invoice.

  4. Click Allocate Credit.

Links to the credit note show above the invoice or bill balance.

Allocate credit from a credit note

  1. Find and open your awaiting payment credit note. Use search if you know the contact's name, or credit note amount.
  2. Click Credit Note Options, then select Allocate Credit.

    The available credit may be the full amount, or less if some was already allocated. You can click the invoice or bill links to drill into the transactions.

    Image showing the Allocate Credit option within a credit note.

  3. Enter the amounts in the Amount to Credit fields for each unpaid invoice or bill you want to credit. You can apply the full credit amount or just some of it.

    Image showing the Amount to Credit field when allocating credit from a credit note.

  4. Click Allocate Credit.

Links to the invoices or bills show above the credit note balance.