Examples: When to Use Credit Memos vs Refunds in X-1FBO
💳 Use a Refund When…
1. Service Was Not Delivered
Scenario: A customer was billed for GPU service but never used it.
Action: Edit the invoice via the Correction button, change GPU quantity from 1 to 0, and process a refund of $100 back to the customer’s credit card.
System Result: A credit refund invoice is created with a “CR” prefix.
2. Customer Requests Money Back
Scenario: A customer overpaid and explicitly asks for the excess to be returned.
Action: Apply the exact invoice amount, then refund the difference.
System Result: Funds are returned to the original payment method, and the refund is logged in AR and GL movements.
3. Processor Requires Refund for Captured Transaction
Scenario: A transaction has already been captured in Adyen and cannot be voided.
Action: Use the refund option in X-1FBO to correct the transaction.
System Result: Refund is processed and reconciled in the disbursement report.
🧾 Use a Credit Memo When…
1. Customer Prefers Credit on Account
Scenario: A customer overpays but wants the excess applied to future invoices.
Action: Apply the exact invoice amount and use “Credit on Account” for the remainder.
System Result: Credit memo is stored in the customer’s account and can be applied later.
2. Invoice Correction Without Cash Return
Scenario: A billing error is corrected, but no refund is needed.
Action: Adjust the invoice and generate a credit memo.
System Result: Credit memo offsets future charges and appears in AR.
3. QuickBooks Sync Requires Credit Memo Format
Scenario: Refunds processed in X-1FBO need to sync to QuickBooks Online.
Action: Process refund in X-1FBO; it syncs as a credit memo in QBO referencing the original invoice.
System Result: Maintains consistency across systems.
⚠️ Special Case: Overpayments
Scenario: A customer attempts to pay more than the invoice amount.
Action: X-1FBO blocks overpayments. Apply the exact amount and use “Credit on Account” for the rest.
System Result: Prevents errors and ensures proper reconciliation.