How do Credits work?
Credits are a great way to track payments received from Clients that have not been applied yet. You can apply this Credit towards existing and new Invoices for payment in a snap! If you are looking for a way to request and track Deposits in FreshBooks, please see our article on Deposits here.
- Add a Credit
- Apply Credit as Payment (New Invoice)
- Apply Credit as Payment (Existing Invoice)
- Delete a Credit
Add a Credit
- Go to the Invoices tab and then the Credits sub-tab
- Click on the New Credit button
- Fill out the Credit receipt exactly the same way you would do when you create a new Invoice (select a Client from the drop-down, enter the amount in the Tasks/Items section)
- Save and/or Send by Email the Credit receipt to the Client. You can see this newly created Credit in the Credits sub-tab now.
Apply Credit as Payment (New Invoice)
- Create an Invoice as usual, but don’t Save/Send yet
- If this is a new Invoice, you’ll see below the Balance Due, a highlighted field with an option to Apply credit of $X.XX as payment. Check the box
- Feel free to add something in the Notes Visible to Client box about the Credit being applied as an advance payment
- Save and/or Send the Invoice by Email/Snail Mail. The Credit will be automatically applied.
Apply Credit as Payment (Existing Invoice)
- Go to the Invoices tab
- Check the box besides the Invoice
- Click on the Enter Payment button above the list
- Select Credit from the dropdown, it will tell you the Credit Balance for that Client
- The payment amount will default to the full Credit amount/Invoice total (depending on which is lower). If you wish to apply a lesser amount, simply change the amount
- Click the Save button and now the Credit is applied to the Invoice.
Delete a Credit
- Go to the Invoices tab
- Click on the Credits sub-tab
- Check the box off next to the Credit
- Click the Delete That’s it!
What are these extra credits that appear in my Payments sub-tab?
When manually entering payments on an Invoice, if you enter an amount that is over the balance due, you are notified of paying more than the balance. This automatically creates an overpayment Credit for that Client when you save the payment. Any overpayment Credits you see in your Payments sub-tab is a result of this.
Note that there will be two payment entries for the one payment you create in this scenario - one is the payment towards the full balance of the Invoice, and the other is the overpayment Credit created from the amount overpaid.
How do I find out how much Credit my Client has?
You can always see the Client’s remaining balance anytime by going to the People tab and clicking on a Client’s name. Any remaining Credit left over will be visible in the Account Standing area.
Can I use retainers with this feature?
Yes you can! Just use a slightly different workflow:
- Create an Invoice for the retainer amount you want to charge for, and send that to your Client
- Have your Client pay this Invoice in full (for the retainer amount)
- Once the Invoice is paid, go to the Invoices tab
- Check the box off next to this Invoice
- Click on the Delete button
- A pop-up will ask you how you want to handle the payment on this Invoice. Choose Convert Payments to Credit
- A Credit will be automatically created with this amount for you to use on future Invoices, as a retainer.