How To Unapply a Credit Memo in QuickBooks Desktop: Fix Now

Do you also use this software to handle your company’s financial data easily? Then, if you are reading this blog, that means you must be facing this problem and looking for solutions on how to unapply a credit memo in QuickBooks Desktop. You apply a credit memo to an open invoice but realize it was actually linked to the wrong transaction, the wrong customer, or a totally incorrect amount. Here, we are going to talk about this problem in detail & give you some easy ways to deal with it.

First of all, in the desktop version of QB, fixing this isn’t as simple as clicking an undo button. Because this software uses a double-entry accounting system, every action creates a digital footprint. Now, to keep your books balanced and 100% accurate, you have to follow a specific process to detach the credit from the invoice without deleting your whole history.

And if you’ve accidentally applied a credit and need to reverse it, don’t stress it too much. Just keep reading this blog to fix this issue in minutes. 

A Quick View Table – How to unapply a credit memo in QuickBooks Desktop​

What is a credit memo in QB?	A credit memo is an official document that companies create to reduce the amount a customer owes them, without actually giving them cash back.
What does it do exactly?	It fixes billing mistakes,
Methods to try to unapply a credit memo in QuickBooks​	1. You can unapply your credit memo easily: In Desktop, open the wrong invoice, press Ctrl + H, and uncheck the credit in the Apply Credits window.  2. In QBO, disconnect the link by deleting the combined transaction from the invoice’s Payment link.

Some Points to Remember Before You unapply a credit memo in Quickbooks

Now, before you sit to unapply a credit memo in QuickBooks Desktop, keep these quick checkpoints in mind to avoid messy books:

1. Always remember to back up your file (in QB Desktop) or just double-check the customer’s balance history before making changes to linked transactions. 
2. Second, the important thing to keep in mind is that, to unapply, you usually need to open the invoice the credit was originally applied to, not the credit memo itself. 
3. Third, look for the Apply Credits button or option on the invoice screen. Unchecking the credit memo breaks the connection here. 
4. Fourth, make sure to save your changes properly. Once you uncheck the credit memo and hit “Done,” make sure you click Save and Close. QB will likely ask & confirm if you are sure you want to change linked transactions. Just click Yes.  
5. Lastly, check your records: After you unapply it, the credit will go back to being unapplied/available for this customer. It’s always a good idea to check the customer’s account to make sure the balance is correct.

How to unapply a credit memo in QuickBooks Online​ & Desktop?

Now, let’s finally learn how to unapply a credit memo in QuickBooks​ easily and continue working in QuickBooks without any stress.

Method 1: Unapplying a Credit Memo in QB Desktop Version

First, to unapply a customer credit memo from an invoice, follow these steps. 

1. You have to find the invoice first. Open the Invoice to which the credit memo is currently applied.
2. Then, press Ctrl + H on your keyboard to open the Transaction History window.
3. Then, modify the credits, double-click the payment/credit to open the Apply Credits window.
4. Just remove the link under the Previously Applied Credits section, uncheck the credit memo you want to remove, and click Done.
5. In the last step, save your changes, and click Save & Close in the invoice window

Method 2: Unapplying a credit memo in QBO

1. First, turn off the automation, then click the Gear icon in the upper-right corner and select Account and Settings.
2. Secondly, select the Advanced tab and go to the Automation section.
3. Third, turn off the Automatically apply credits radio button.
4. Then, Hit Save, then Done.
5. Now open the invoice, then go to the Sales menu and the Customers tab.
6. Now, select the customer from the list.
7. The next step is to locate and open the payment transaction.
8. To open the invoice, click the 1 payment link below the PAID status. 
9. Now just click the More option at the bottom, then choose Delete. 
10. Finally hit Yes to confirm.

Once you are done, the credit memo is now. You can manually apply it to the correct invoice. Just go to the Receive Payment feature to manually apply the credits to the appropriate invoice. 

What is a credit memo in QuickBooks? What does it do?

Alright, let’s first learn what this credit memo is. Let’s discuss this first, just in case you have any confusion. A credit memo is an official document that a company issues to its customer to reduce the amount the customer owes or to give them credit for a future purchase. A credit memo is a short form of a credit memorandum.

You can think of a credit memo as a reverse invoice. While an invoice tells a customer how much money they owe you, a credit memo tells them how much money you owe them or how much you are reducing from their outstanding balance. It allows both parties to adjust their accounting records without deleting or altering the original invoices. 

So, what exactly does it do? In simple words, when you unapply a credit memo, you are telling QuickBooks to untie two documents that you mistakenly tied together. This step immediately changes the status of both records without altering your actual financial data. The affected invoice reverts to unpaid status, the balance increases by the credit amount, and the credit memo returns to your available funds. Now it can be applied elsewhere. It mainly reverses the payment relationship while keeping your audit trail complete & intact.

After learning what is a credit memo unapplied in QuickBooks. Let’s see how you can correct or unapply your credit memo in your QB. We’ll tell you some easy steps to do it.

Conclusion:

Let’s wrap things up quickly. In this blog, we have learned how to unapply a credit memo in QuickBooks Desktop plus online. We have started with the basics, explaining what a credit memo actually is and what it does, so you have clarity.

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