Thanks for getting back to the Community, KalRe.
Allow me to share some insights regarding your concern about how credit memos and refund receipts function in QuickBooks Online.
In QuickBooks Online credit memos reduce the price of an item purchased by a buyer or eliminate the entire cost of an item. When a seller issues a credit memo, it's put toward the existing balance on a buyer's account to reduce the total. You can check this article to learn more about how and when to give a credit memo or delayed credit to customers: Create and apply credit memos or delayed credits in QuickBooks Online
Moreover, a refund receipt is a record that shows that you have issued a refund to someone. It indicates the source of the refund (cash or checking account), the recipient of the refund, and the specific product or service for which the refund is being given. The refund amount is displayed as -100, similar to a credit memo. The main difference is that with a credit memo, no money leaves your cash or checking account; instead, it is saved as a credit that can be used as payment for a future or open invoice.
It will not reduce the balance of the invoice since it is another transaction that can't be linked to the invoice, since it is another process of the transaction.
Additionally, we recommend you visit the following articles as your future references:
If you have any more questions or if you need further assistance in handling your credit memos and refund receipt. I'm just a reply away. Have a lovely day!
