How to Create an Invoice Line Item Credit in QBO

Last updated: July 21, 2025

Summary / Introduction

Learn how to create a credit note by adding a negative line item to an existing invoice. This process allows you to offset or cancel out a previously issued invoice for revenue purposes.

Prerequisites / Requirements

  • Roles/Permissions: Access to invoice editing capabilities, invoice must be in DRAFT status

  • Dependencies: Integration item mapped to a contra revenue account in QuickBooks Online (QBO)

Step-by-Step Instructions

  1. Reset Invoice Status: Change the invoice status to DRAFT, ensure invoice is in DRAFT state

  2. Access Invoice Editor: Click the 'Edit' button on the invoice

  3. Add Credit Item: Click '+ Add one-off item'

  4. Select Integration Item: Choose an integration item that is mapped to a contra revenue account in QBO

  5. Enter Details: Input the quantity and price for the credit

  6. Save Changes: Click the 'Save' button to apply the credit

Tips & Best Practices

  • Tip #1: Ensure the integration item is properly mapped to a contra revenue account before creating the credit note

  • Tip #2: Double-check the amount being credited matches the intended credit amount before saving