Can I transfer credit from one customer to another?

Yes, though QuickBooks Online has no single command that moves a credit between customers. The standard method is a journal entry that removes the credit from one customer and creates the same credit for another. Two linking steps then tie the entry to each customer so balances and reports stay accurate.

Before you start

Check a few things first, because the method has limits.

• Both customers must use the same currency. A journal entry cannot move a credit between customers set to different currencies.
• Note the amount before you begin, and decide the date. The credit moves on the date of the entry, and the aging report follows that date.
• If the credit’s original month is already closed, date the entry in an open period.
• If the credit came from a refunded sale, ask your accountant first. The entry moves the balance owed, not the revenue behind it.

Create the journal entry

1. Select + New and then Journal entry.
2. Set the Date, and enter a Journal no. if you use them.
3. On the first line, choose Accounts Receivable as the Account, select the customer who holds the credit in the Name column, and enter the credit amount in the Debit column.
4. On the second line, choose Accounts Receivable again, select the customer receiving the credit in Name, and enter the same amount in the Credit column.
5. Add a memo naming both customers and the reason, then Save and close.

QuickBooks Online requires a customer in the Name column of any line that uses Accounts Receivable. Older instructions say to leave the name blank, but current builds will not save the entry without one.

Clear the first customer

The entry now shows as an amount due for the first customer. A zero payment links it to the credit memo so the two cancel out.

1. Select + New and then Receive payment.
2. Choose the customer who held the credit.
3. Under Outstanding Transactions, check the journal entry.
4. Under Credits, check the credit memo.
5. Confirm the payment amount at the top reads zero, then Save and close.

The credit memo and the entry offset each other, and that customer’s balance returns to zero. The memo remains on their transaction list as history, with no open credit behind it.

Apply the moved credit

The journal entry has already placed the credit on the second customer’s account. Nothing more is needed until they have an open invoice; the credit waits and appears on their statement.

When an invoice exists, apply it this way:

1. Select + New, then Receive payment, and choose the second customer.
2. Check the open invoice under Outstanding Transactions.
3. Check the journal entry under Credits, and watch the amount due drop.
4. Save and close.

Should you void instead?

If the credit memo was issued to the wrong customer and has not been applied, sent, or matched to a payment, void it and issue a new one to the right customer. That leaves a cleaner record. A journal entry transfer works best when the original memo must stay in place, for example after it has been sent or applied.

When one pays for another

If the same payer regularly covers a second customer’s invoices, link the two records instead of moving credits each time. Set the payer as a parent customer, mark the other as a sub-customer, and choose the setting that bills the sub-customer with the parent. Their transactions then combine on the parent’s statement, and no journal entries are needed.

What should you check afterward?

• Open the first customer’s profile; the balance should be zero.
• Open the second customer; the credit should show for the amount moved.
• Run the accounts receivable aging summary; the credit should sit under the second customer only.
• Reread the memo you wrote. A journal entry between customers is easy to misread months later, and the memo is the explanation.