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How to handle credit notes with QuickBooks Online

Manage accounts for sales order returns with credit notes.

Dayvid Lorbiecke avatar
Written by Dayvid Lorbiecke
Updated today

Credit notes for returns help make sure that your accounting stays accurate across the board.

You can create credit notes for all approved return orders. These notes document and process customer refunds in your accounting system.

When refunding a sales order (SO), you can either Refund some or Refund all.

Refunding an SO


Open the return, and if the entire SO is being refunded, select Refund all from the dropdown menu at the top.

This action will:

  • Automatically include all items from the return in the credit note

  • Send the credit note to QuickBooks Online

  • Mark all items as refunded under the Refunded section

Choosing to refund all of a sales order then sends all items of the SO to QuickBooks as a credit note

If only part of the SO is being refunded, select Refund some. You can then choose the specific items that will be refunded and a credit note will be created in QuickBooks for only those selected items.

Each credit note created is linked under the Refunded section for traceability.

On a return, you can choose specific items from the original SO and just return those

If a return is partially refunded, there will be 2 tables: Not refunded and Refunded.

Example of a credit note in QuickBooks Online

How a credit note looks inside of QuickBooks Online

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