Issuing a credit from an invoice and applying it

What is this page about: How to raise a customer credit directly from an invoice, for the full remaining balance or part of it, and why a credit issued this way applies itself when you post it. It also covers applying an existing credit to a different invoice, and what blocks each path.

# On this page

• Issue a credit for the full remaining balance
• Issue a credit for part of the balance
• Issue a credit or apply one
• Apply an existing credit to a different invoice
• What blocks the flow
• Best practices
• Related articles

# Issue a credit for the full remaining balance

1. Open the invoice you want to credit. It must be Open or Partially paid.
2. Open the ⋮ menu and click Issue customer credit.
3. Confirm in the Confirm create customer credit dialog.
4. The new credit opens in Draft, with lines pre-filled for the invoice's full remaining balance. Leave them as they are.
5. Click Post, then choose Post & send customer credit or Post only.

Posting applies the credit to the same invoice automatically, with no separate Apply step. The credit moves to Cleared and the invoice moves to Paid.

# Issue a credit for part of the balance

1. Follow steps 1 to 3 above.
2. On the Lines tab, reduce a line's amount or quantity so the credit is less than the invoice's remaining balance.
3. Click Post.

The smaller credit still applies itself to the invoice. The credit moves to Cleared, because it's fully used, and the invoice moves to Partially paid, with the difference still to collect.

# Issue a credit or apply one

The two actions start from different places:

• Issue customer credit starts from an invoice. It creates the credit and links it to that invoice, and whatever amount the credit carries when you post it is applied there.
• Apply to invoice starts from a credit. Use it for a credit created on its own, or to use what's left of a credit against a different invoice.

# Apply an existing credit to a different invoice

1. Open the posted customer credit.
2. Click Apply to invoice.
3. Select the invoice. The list shows Open and Partially paid invoices for the same customer, entity and currency.
4. If the entity uses partial allocation, enter an amount up to the credit's available balance. Otherwise the full available balance is applied.
5. Check Available invoice amount, Total credit and, with partial allocation, Remaining credit.
6. Click Apply to invoice, then Confirm.

Partial allocation is on by default for each entity, and switches off automatically once the entity has an e-invoicing provider. There's no setting to change it yourself.

# What blocks the flow

• Issue customer credit isn't offered on a Paid invoice. If the invoice isn't in a state that allows it, Light shows "Invoice receivable is not in a state that allows customer credit creation".
• Applying more than the invoice's remaining balance fails with "Customer credit amount plus sum of linked amounts will exceed the invoice receivable amount".
• Applying more than the credit has available fails with "Customer credit link amount exceeds the available customer credit amount".
• On an entity without partial allocation, only the credit's full available balance can be applied.

# Best practices

• Use Issue customer credit when the credit is for the invoice you're looking at. It saves the Apply step and keeps the two linked from the start.
• Use Apply to invoice for standalone credits, or to use the rest of a credit on another invoice.
• On entities with e-invoicing, plan each credit for its full amount, since partial allocation is off there.
• Check the statuses after posting: Cleared means the credit is fully used, and the invoice shows Paid or Partially paid.

# Related articles

• Credits vs refunds: which and when
• Customer Credits
• Invoice Generation
• Tracking Payments and Outstanding Balances

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