> For the complete documentation index, see [llms.txt](https://www.zerabooks.com/help/llms.txt).
# Credit memos
A credit memo is an invoice with a negative total. Create one to credit a customer, then apply it to one of their unpaid invoices.
## Create a credit memo
There is no separate button: an invoice whose total is below zero becomes a credit memo.
1. Go to **Bills & Invoices** › **Invoices** and click **Create Invoice**.
2. Choose the **Customer** you're crediting.
3. On the line, keep the quantity positive and enter a **negative price**, for example Qty `1`, Price `-49.00`. Pick the income category you're reversing.
4. If the original invoice had tax, enter the tax as a negative amount too. A credit must reverse both the amount and the tax.
5. Click **Preview**, then **Approve**.
The document now reads **New Credit Memo** and, once approved, **Credit Memo Approved**. On the board its card shows **Credit issued** and the date.
{% hint style="info" %}
**Tip:** A negative quantity is refused with "Quantities can’t be negative. For a credit, keep the quantity and enter a negative price."
{% endhint %}
## What posts
A credit memo is the reverse of an invoice: it debits the income category (and **Tax charged on sales**, if any) and credits **Accounts Receivable**. The customer now owes you less.
## Apply it to an invoice
1. Open the credit memo and click the **Payment** tab.
2. Click **Apply credit to an invoice**. Only unpaid invoices for the same customer are offered.
3. Next to the invoice, click **Apply credit**, check the amount and click **Apply**.
Or start from the invoice: on its **Payment** tab, click **Match payment or apply credit**, find the credit under **Available credits**, and click **Apply credit**.
"Applying a credit moves no money. It reduces both documents through Accounts Receivable and never releases retainage." When all of the credit is used, the credit memo moves to **Paid** and reads **Applied**. Until then its card shows what's still **Available**.
## Send it to the customer
Click **Send** on the approved credit memo. The default message reads "Here is your credit memo. It will reduce the amount you owe us." See [Email an invoice, send it manually, or download the PDF](https://www.zerabooks.com/help/invoices/send-an-invoice).
## Frequently Asked Questions
How do I issue a credit memo?
Create an invoice for the customer with a negative price on the line, so the total is below zero, then approve it. It becomes a credit memo automatically.
Can I apply one credit memo to several invoices?
Yes. Apply part of it to one invoice and the rest to another. Its card shows the credit still **Available** until it's all used.
Can a credit memo reduce an invoice for a different customer?
No. A credit only applies to invoices for the same customer.
How do I refund a customer in cash instead?
Once the refund shows on an uploaded bank statement, match it to the credit memo from the credit memo's **Payment** tab, the same way a deposit is matched to an invoice.
Can I undo an applied credit?
Yes. On the **Payment** tab, click **Release** under the credit. The credit memo gets its balance back and the invoice is owing again.
Can a credit memo become overdue?
No. Credit memos have no due date to miss and never get payment reminders.
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