Record a customer credit from a deposit

Sometimes a customer pays you money that isn't income: they pay the same invoice twice, they send a payment with nothing outstanding behind it, or they pay a deposit you haven't billed yet. That money is in your bank, but it is owed back to them. Recording it as a customer credit says exactly that.

1. On Ledger › Banking › Transactions, find the deposit that arrived.
2. Click Customer credit.
3. Pick the customer it belongs to and click OK.

The line shows a credit ↪ chip (with Undo to reverse it), and the customer now carries that credit balance.

Why this isn't a credit note

A credit note reverses a sale: it takes the revenue back off your books and reverses the sales tax with it. A duplicate payment is not a sale being returned. The sale, if there was one, was already recorded once and is correct. So recording a customer credit deliberately moves no revenue and no sales tax. It only records that you are holding their money.

Giving the money back, or using it up

Once the credit exists you have two ways to clear it:

• They want the money back. Find the withdrawal where you sent it and click Credit refund, then pick the same customer. Their credit goes back to zero and the two bank lines cancel out. Both steps work on bank lines in your book's own currency; a foreign-currency line is refused rather than recorded at the wrong value.
• They'd rather it come off their next bill. Apply the credit to an open invoice from the invoice itself. The credit covers part or all of the balance.

Why recording it matters

If you leave the duplicate deposit and the money you sent back both uncategorized, your books look right only because the two cancel out. In between them, which can be weeks and can cross a month end, your cash balance is understated by the full amount. Recording both puts the money in the bank on the day it arrived and takes it out on the day it left, so a month-end or year-end report in that window is correct.