How to Add Credit on FreshBooks?

You don’t always get the perfect scenario when dealing with customers, but who doesn’t like a little bit of challenge? Meeting customer demands and building a solid base requires the extra effort. Whether it’s a discount, refund or a gesture of good-will, you can track all kinds of payments by adding Credit to your Client’s account on FreshBooks.

What’s a Credit?

Credit is an amount held in your Client’s account, which can be used in a future invoice or rendered at a later date. That way, you can manage vouchers, offers, or overpaid transactions with your Client.

There are three types:

  • Prepayments: when a Client pays for a product or service without creating an invoice.
  • Credit Notes: used for discounts, vouchers, loyalty rewards and compensations to establish a good relationship with your Client.
  • Overpayment: when the Client pays more than the total amount of the invoice.

In order to add a Prepayment or Credit Note, you will need to start by logging into your FreshBooks account on your desktop or mobile web browser.

Method 1: Adding Prepayment + Credit Notes

1. At the top right of your Dashboard, click on ‘Create New’

Head to Credit and a new draft will pop-up

2. Add a Client

Choose one from your existing list, or create a new one by filling out their details (name, company, address).
Learn more on How to Add a Client and Manage Clients on FreshBooks.

3. Add a Line

Enter a product or service from your existing list of items or create a new one by filling in the name, price rate and quantity.
You can also fill out a description below the item.

4. Add Notes and Terms

This is optional. You can add an expiry date for the voucher or details regarding the refund.

5. Choose a Payment Method (for Prepayments only)

Scroll through the list or type in the method you’re searching: bank transfer, cash, check, credit card, etc.…

6. Head to the Settings right sidebar and choose the Credit Type

You can choose between Prepayment or Credit Note.
*Overpayments can only be added when an invoice is being paid.

7. Choose Currency & Language

If you want to change the default settings.

8. Click on ‘Save’ (to add Credit without notifying your Client)

9. Click on ‘Send to’ (to add Credit + send an email to your Client)

You can send it to one or more contacts listed under the Client’s account.
Type in the subject of the email and a personal message if needed and press on ‘Send Credit’.

Method 2: Adding Prepayment + Credit Notes

Another way to add and view existing Credits for Clients:

1. Head to Clients (3rd icon on the left sidebar – hat icon)

2. Choose a Client from the list

The total amount of Credit available is shown under the Outstanding Revenue chart

3. Scroll through the tabs at the bottom and Click on Credit

You will find the list of Credit history whether it is used up or not

4. Click on the ‘+’ green sign to a create a new one

Complete the same steps mentioned above

To learn more about your Clients, you can check out How to Add a Client and Manage Clients on FreshBooks

How to Add Overpayments Credit

1. Head to the Invoices (4th icon on the left sidebar – paper and quill icon)

2. Click on the Invoice your Client wants to pay or has already paid for

3. Head to ‘More Actions’ and press on ‘Add a Payment’

4. Choose a payment method and fill in the amount paid

If the amount is more than the total of the invoice, the balance will be automatically added to your Clients account as Overpayment.
You can also choose to notify your Client via email of the payment made.

To learn more, you can check out How to Create an Invoice on FreshBooks

Learn other features on FreshBooks and stay on top of your finances:

How to Create a Proposal on FreshBooks?
What’s the Difference between Estimate and Proposal on FreshBooks?
How to Invoice an Expense to a Client on FreshBooks?
How to Create a Project on FreshBooks?
What’s a Retainer on FreshBooks?
How to Add Payments on FreshBooks?