Skip to main content
Webinar: Billing & Invoicing Best Practices for AE Firms
Thursday, July 25th, 2024 | 1PM ET | 10AM PT | Register Now
Product Tips and Tricks

Give Credit Where Credit is Due: How to Use Credits in CORE

CORE makes it easy to record and apply credits so that you can keep your clients happy and stay on top of your accounting.

In a perfect world, everything goes according to plan when running a business. Every project is finished on time and your clients are always satisfied.

But this ideal scenario is far from the norm for most companies. More often than not, issues occur which require frequent adjustments to deadline adjustments changes to project designs.

Though you put your best foot forward with every project, problems arise and can lead to tension with your clients.

To help lessen this tension, CORE offers an option called ‘Credits.’ This feature lets you:

  • Discount what a client owes you

  • Refund a client

  • Offer as ‘a favor’ in return of something

Continue reading to learn about how you can use credits in CORE and the impact this feature can have on your accounting.

Using Credit Memos for Project Credits

One of the most common ways to use credits in CORE is to offer them as project credits to a client. A project credit is usually given to a client as a favor or in exchange for something.

Say a client has referred you to many people, leading an uptick in business. As a sign of appreciation, you agree to apply a $5k credit to the project you’re working on for the client. Even if the client already paid in full for the project, you can still use CORE credits.

In this example, let’s say client X already paid you the full $10k. So, how does the project credit work for this transaction in CORE?

  1. You invoice the client initially $10k for the project. Your accounts receivable is debited and your income account is credited for the $10k.

  2. Your client pays the $10k, crediting your accounts receivable and debiting your bank account.

  3. You offer a $5k project credit to the client using Credit Memos. This credits your accounts payable and debits your expense account.

  4. BQE CORE creates a vendor bill in the background as the project credit is made. You still owe your client the $5k, which you can pay using Bill Payments.

  5. The Bill Payments screen displays the vendor bill you have to reimburse. You can select the check payment method for this and then cut a check for the client from the Checks screen (See CORE Help for detailed steps).

This final step credits your checking account and debits your accounts payable.

You have officially applied a project credit in CORE, keeping your client happy and your accounting balanced.

Using Credit Memos for Retainer Refunds

Another way credits can be used in CORE is for refunding retainers or an advance payment paid by a client. This can also be achieved by using Credit Memos.

Let’s say you agree to do some landscaping work for a client. As a part of the agreement, you ask for a $3K retainer upfront. After completing the work, the client asks you to refund the retainer to them, rather than applying it to what they owe you.

Here’s how you can refund this retainer using credits in CORE:

  1. You complete the landscaping work and everything looks good according to your client, so you prepare to refund the retainer as agreed. Using the Credit Memos screen, you create a new credit memo as a Refund Retainer transaction. This credits your accounts payable and debits your liability account.

  2. BQE CORE creates a vendor bill in the background based on this transaction, which will have to be paid off as you complete the transaction later.

  3. Now you have to cut a check for this client for the $3k. You use the Bill Payments screen to record a check-type payment for your client.

  4. Then you print the check from the Checks screen and send it to your client (See CORE Help for detailed steps).

This credits your checking account and debits your accounts payable. Your client gets the retainer refunded back and the transaction is officially complete.

Applying Credit Payments to Invoices

You can also apply credits as a payment towards an invoice with the CORE credits feature. This is often done in transactions where you agree to give the client credit towards an invoice to settle a dispute or for any other reason, such as a discount.

Say you agree to apply a credit of $1k towards an invoice to reduce the client’s outstanding invoice amount and also your accounts receivable. Here is how you would apply credits to an invoice in CORE:

  1. You have already invoiced your client for the work done thus far. This invoice debits your accounts receivable and credits your expense account.

  2. Using the Payments screen, you can apply $1k towards this invoice. For this, you select Credit as the payment method and $1k for the payment amount (See CORE Help for detailed steps).

This transaction debits your expense account and credits your accounts receivable. The invoice amount has now been reduced, leaving you with a content client and a (slightly) higher expense account.

Applying the Correct Credit Solution in CORE

Credit does not have to be a complex process to use in your project management software. Understanding the different ways you can apply credits in CORE will help you ensure you always have the right credit option for every scenario.

Want more tips to increase efficiency and improve your bottom line? Click below to download a free eBook on 5 Billing Practices That Are Killing Your Business.

Similar posts

Get notified on the latest for your industry

Be the first to know the latest insights from experts in your industry to help you master project management and deliver projects that yield delighted clients and predictable profits.