Understanding Client Credit Balances
Client credit balances are an important aspect of managing your business finances. They can be created in a variety of ways and it's important to understand how to handle them properly.
What are Client Credit Balances?
A client can have both a debit balance and a credit balance.
Debit balance is the Outstanding Balance that is due to you
Credit balance is an available balance that can be used by the client
How are Client Credit Balances Created?
Client credit balances can be created in a few different ways:
Adding a payment to a client and selecting the Add to Credit option.
An overpayment that occurs when a client pays more than the amount due or owing.
A credit note is generated from either a product return, a credit of services, or ad hoc reasons such as loyalty or referrals.
When a product or service is removed from a sale that has been partially or fully paid for, it affects the transaction record.
When a product or service is on a sale that has been partially or fully paid for, has a discount added or increased.
📌We do not recommend deleting products or services from a sale unless it is done on the same day as the sale. Instead, we recommend either doing a product return or issuing a credit note.
Tracking Client Credit Balances
To help you understand client credit balances more accurately, we have a client credit tracking feature. This feature shows you each occasion that resulted in creating a credit balance for a client.
From this modal, you can easily open the related sale or credit note to see the details of the transaction.
The Payment Report can also be used to ascertain which payments resulted in client credit being created. This is especially for the overpayment scenario mentioned above (#2).
The credit value shown here is dynamic as it updates as the credit is applied or used on a sale.
What Can You Do with Client Credit Balances?
When a client has a credit balance, there are a few different options for handling it:
If the credit originated from a credit note, you might choose to apply it to an outstanding sale or refund it to the client.
If the credit resulted from an overpayment, you have the option to apply it to an unpaid sale or execute a payment reversal on the associated sale and payment.
If a product or service was removed from a sale that was partially or fully paid, the resulting credit is considered an overpayment and can be managed in the same manner.
📌All the above actions will result in the reduction of credit value available.
Properly managing client credit balances is crucial for maintaining accurate financial records and providing excellent customer service. If you have any further questions about client credit balances.