Credit Memos and Pre-Payments

Credit Memos and Pre-Payments are document types you choose when you create a new invoice (alongside a standard invoice).

Credit Memos reduce what a client owes or document a return or adjustment, depending on how your team uses them.

Pre-Payments record money received ahead of work; that amount becomes client credit you can apply to later invoices. It is separate from any one invoice’s balance until you apply it using Apply Pre-Payment (or similar settlement actions) on open invoices.

Report vs document type: This article is about creating credit memos and pre-payments as documents. For a report that lists credits and pre-payments across clients, open Credits and Pre-Payments under Reports.