• Home   /
• Blog
• Unapply a Credit Memo in QuickBooks With Easy Steps

Unapply a Credit Memo in QuickBooks With Easy Steps

• 
• By Jonathan Browns
• Dec 10, 2025
• Accounting
• 7 min read

At times, a customer accidentally overpays an invoice, and a credit memo is automatically applied to the wrong invoice. Here comes a time when you need to unapply a credit memo in QuickBooks to settle down the overpayment made to an invoice. Herein, in this guide, we have provided you with the step-by-step instructions on how you can unapply a credit memo in QuickBooks Desktop & Online.

How to Find Credit Memos in QuickBooks Desktop?

Before making any adjustments to overpayment in QuickBooks, you first have to find a credit memo in QuickBooks Desktop. Carry on with the steps instructed below to complete the process.

• Initially, log in to the QuickBooks application and move to the Report menu. Then, opt for the Customers and Receivables option.

• Head to the Transaction List by Customer by clicking on the drop-down menu list.
• Choose the Customize Report option and then browse to the Filters tab.
• Now, you need to insert the Transaction Type into the search field.
• Next, opt for the Transaction Type and hit the Credit memo by clicking the drop-down arrow.

• Finally, you will be able to get all the Credit memos available in QuickBooks Desktop.

Understanding Different Ways to Unapply a Credit in QuickBooks

Once you find the credit memo, you can unapply a credit in QuickBooks Desktop. Below, we have listed some of the stepwise instructions to unapply a credit in QuickBooks.

• You can generate credit in QuickBooks to get a refund for the overpayment amount.
• Besides this, you can also generate a journal entry to write off the overpaid amount.
• The users can also apply the credit to an unpaid invoice.
• Above all, you can apply the credit to the next invoice that the customer needs to pay.

Learn More:- QuickBooks Out of Memory Error

How to Unapply a Credit Memo In QuickBooks Desktop Smoothly?

Whenever the customers mistakenly made an overpayment or recorded a credit to the invoice twice, they need to unapply a credit memo in QuickBooks. Doing so will help in fixing the wrongly made credit memo and help you in managing the books of accounts easily.

Remove a Credit From an Invoice

Carry on with the following instructions to remove a credit from an invoice that was wrongly applied.

• Initially, access the credit that you wish to unapply to an invoice.
• After this, double-tap on the invoice and choose the Apply Credits tab.
• Make sure that you unmark the checkbox for credit in the Previously Applied Credits window.
• When all the changes are made, hit the Done option.
• From your invoice, head to the Save and then the Close tab.

Remove a Credit From a Bill

The following are the stepwise instructions to remove a vendor credit from a bill.

• Firstly, you must look for the vendor credit.
• Choose the Bill option to edit the credit into a bill and hit the Save & Close tab.
• Launch the bill and hit the Credit option to change it, and click the Save & Close tab again.
• When you are asked to change the transaction, tap on the Yes option.

Read More:- QuickBooks Insufficient Memory or Disk Space

Conclusion

Here, comes to an end to this post and hope that now you can unapply a credit memo in QuickBooks. Thus, it will help you settle down the invoice payment made by mistake or twice. Furthermore, if you still need any help while unapplyig a credit memo, then connect with our BizBooksAdvice professionals for help.

Frequently Asked Questions (FAQ’s):-

Question 1: How to unapply credit in QuickBooks Online?

Ans. To unapply credit in QuickBooks Online, you must perform the following steps.

• Initially, move to the official Intuit website and click the Reports menu.
• Choose the Find report by name field and hit the Open Invoices option.
• Now, pick the amount you wish to apply and select the payment date.
• Thereon, choose the Save and Close option.

Question 2: How to stop QuickBooks from automatically applying credits?

Ans. To turn off QuickBooks from automatically applying credits, perform these steps:

• Firstly, log in to QuickBooks Online as the admin user and hit the Gear option.
• Choose the Account & Settings option and click Advanced in the left sidebar.
• After that, scroll down to Automation and hit the Edit menu.
• Thereon, toggle automatically apply credits to OFF and hit the Save > Done option.

Question 3: What is a credit memo in QuickBooks?

Ans. A credit memo in QuickBooks is used for generating a credit for a customer, with the intent that it will not be refunded or applied to an invoice as a payment or partial payment.

Question 4: How to handle overpayments in QuickBooks?

Ans. You must perform these steps to handle overpayments in QuickBooks.

• Initially, apply the credit and click + Create, followed by the Receive payment option.
• Now, choose the customer, credit, and the invoice.
• If you see that the credit balance remains from the overpayment, you can apply it toward another open invoice by clicking on it.
• Thereon, hit the Save and New or Save and Close option.

Question 5: What happens if you overpay an invoice?

Ans. When a business receives an overpayment, it needs to notify the customer to give a refund for the excess amount or apply it as a credit to future purchases.