Skip to content
  • There are no suggestions because the search field is empty.

What Happens When an Invoice Is Paid with Credit?

When a client pays an invoice using their account credit, it's important to understand that this transaction differs from standard payments made via cash, card, or bank transfer. Specifically, credit payments do not create transactions.

Key Points

  • No External Transaction Created: Applying credit to an invoice is an internal ledger adjustment within your dashboard. It doesn't involve any actual transfer of funds through payment processors or banks.

  • Refund Limitations: Since there's no external transaction, you cannot process a refund through the standard refund mechanism. Attempting to do so will not return funds to the client or adjust their credit balance.

  • Invoice Status: Once credit is applied, the invoice is marked as "Paid", if it satisfies the remaining invoice balance. This status change restricts certain actions:

    • Editing: You cannot modify the invoice details.

    • Deleting: The invoice cannot be deleted unless it's first marked as unpaid.

Common Scenario

A client accidentally uses their available credit to pay an invoice and then requests a refund to restore their credit balance. Given the limitations mentioned:

  1. Refunding: Not possible through the standard refund process.

  2. Restoring Credit: Requires a manual adjustment to the client's account to reapply the credit balance.

Recommended Actions

To address such situations:

  1. Remove the Credit from the Invoice: Adjust the invoice to remove the desired balance. If necessary, adjust the invoice status to "Unpaid" to allow for edits or deletion.

  2. Manually Adjust Client Credit: Use the "Adjust Credit" function to restore the appropriate credit amount to the client's account.