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How to create a credit note in QuickBooks

To create a credit note in QuickBooks Online, select + New, choose Adjustment note, pick the customer and enter the credit's details. Adjustment note is QuickBooks' name for a customer credit note, and it reduces the customer's balance as soon as it's saved.

  • By Book Keeping Pros
  • Sources checked 17 Oct 2026
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Key takeaways

  • QuickBooks Online calls a customer credit note an adjustment note, and saving one lowers the customer's current balance straight away.
  • A delayed credit is the alternative for credit meant for later, because it leaves the customer's open balance alone until it's added to a future invoice.
  • Adjustment notes count in sales reports even before they're applied to an invoice, while delayed credits only count once they're applied.

Before you start

Have the customer's name and the details of the sale you're crediting to hand: its date, the items and the amount. Use the same line details as the invoice the note reverses. If you often raise one-line credits, Intuit suggests setting up a custom credit service item that you can drop onto a note as a single line.

Choose the kind of credit. An adjustment note suits a customer who wants what they owe now brought down. If the credit is for a later purchase and shouldn't change today's balance, a delayed credit is the better fit, and the note under the steps shows how to make one. Some customers take credit like this in place of a refund. If yours wants the money back, see the how-to on issuing a refund.

A customer who simply paid too much may not need a note at all. Intuit handles an overpayment as a credit you can put against an invoice or refund, which the how-to on applying an overpayment explains.

Check the Automatically apply credits setting as well, because it decides whether QuickBooks puts the note against an invoice for you. The how-to on allocating a credit note covers that setting.

Steps

  1. Select + New (or + Create, depending on your screen).
  2. Choose Adjustment note.
  3. From the Customer dropdown, select the customer you're crediting.
  4. Enter the note's details, such as the date and the amount, following the lines of the invoice it reverses.
  5. When everything is in, select Save and close.

Note

To set credit aside for later instead, select + New (or + Create), choose Delayed credit, select the customer, enter details such as the date and amount, then select Save and close. It waits until you next invoice that customer. In the new invoice layout, choosing them from the Add customer dropdown opens a window of their open transactions, delayed credits included, and Add puts the credit on the invoice as a line item. Adding one to an invoice in an earlier accounting period changes that period's balances.

What changes afterwards

Saving the adjustment note brings the customer's balance down immediately. If they owe you nothing at the time, their balance goes negative. The note also shows up in your sales reports, whether or not it's ever applied to an invoice.

Where the note goes next depends on the Automatically apply credits setting. With it on, QuickBooks puts the note against the customer's oldest open invoice, or against their next invoice if nothing is open. With it off, QuickBooks leaves the note off every open invoice until you link it yourself in Receive payment, and until then the note and the invoice both keep open balances. Allocating a credit note has its own how-to with the steps for both.

Adjustment notes take their look from the Standard template. Whatever customising you do to that template carries through to the notes you create, so that is where to change how they look.

General information

This how-to follows Intuit's own help for QuickBooks Online. Screens change between versions, so if yours looks different, use the Intuit article in the sources. It is general information about using the software, not advice about your business. Sources checked 17 October 2026.

Sources

  1. Handle customer adjustment notes and delayed credits, QuickBooks Online help (Australia)

    Intuit Australia Pty Ltd. Current at 17 October 2026, released 17 October 2026. Checked 17 October 2026.

    QuickBooks is a trademark of Intuit Inc. Licence: Intuit Australia legal terms (facts quoted with attribution, no endorsement implied).

  2. Handle a customer credit or overpayment, QuickBooks Online help (Australia)

    Intuit Australia Pty Ltd. Current at 17 October 2026, released 17 October 2026. Checked 17 October 2026.

    QuickBooks is a trademark of Intuit Inc. Licence: Intuit Australia legal terms (facts quoted with attribution, no endorsement implied).

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