There has been confusion between the use of a credit versus using an adjustment on an invoice item. Though the intentions may be the same, the use of both is quite different depending on the situation. Just a quick reference to what each of these are to get us started before going into how they interact with an invoice and the difference between them:
One thing to remember with credits, they act as form of payment within our system whenever a customer was issued an account credit previously. In the article about credits, there are two ways to issue them. You can either issue it from an invoice item that had a payment found on it previously or you can issue it as a generic credit. Let's go over an example of how each of these interacts with the invoice.
Here we have an invoice where a Generic Credit of $100 was issued to be applied on the same invoice with a $100 payment to leave no balance owed:
Note that the class is the same amount but the credit is not attached to the class at all. This means that there is no tracking of the class showing a reduction in fee, rather you are just issuing a free $100 credit to this customer to pay for this invoice. Generic Credits, as noted in the support article:
""Generic Credit" is ASAP credit NOT CONNECTED to any invoice item. This means that the credit is not tied to any items on the invoice and acts as free monies from your organization to the customer. This is mainly used for a quick use issuance of credit to the customer. This means that the credit given does not have any G/L or other financial codes tied to it as it is free monies."
To further clarify, it's only recommended to issue a generic credit if you're intending to offer this credit as free money towards that account THAT DOES NOT INTERACT WITH THE INVOICE ITEMS. If you issue a Generic Credit, you are in a sense, giving that customer free money to use in the system THAT DOES NOT GET TRACKED BY ANY G/L CODES NOR IS IT ASSOCIATED WITH ANY ITEMS FOUND ON THE INVOICE.
Credit from an Item
In this example, we first have a payment recorded before issuing a credit from the item which is then directly applied back on to the invoice:
One thing you'll note is that the fee is now reduced down by $100 due to a credit being issued from an invoice item that shows a payment. Another thing you'll note is that the payments are all correct, however there's not a description as to why the credit was generated. In the support article it talks about credits from invoice items. This method does tie back to the correct G/L code since it is coming from the same item and can be tracked appropriately, however there's no description as to why this action was taken.
Here we have just an adjustment found with the fee fully paid off:
You'll note with an adjustment found, I can leave a description as to why I'm reducing the fee as well as any notes with it. The customer isn't paying anymore than what they owed and it's a cleaner display for them to review. Using this method also ties the reduction towards the proper class and G/L code since the adjustment is done directly to that class.
If you're trying to reduce a fee amount, the BEST option is to use the Edit Invoice button to make an adjustment towards that invoice item. This way, it not only ties the changes directly with that item but it also does not create unnecessary credits and credit payments which may confuse the customer in thinking they may be overpaying for an item.
If you want the customer to get free money to use for an invoice, the Generic Credit is your solution. Just note that a Generic Credit is not financially tied to any items or G/L codes and is just a way of issuing free money for your customers to us.
if you're issuing a credit from an invoice item, the best practice for this is when you either plan to use the credit issued on a different invoice or invoice item. Generally, this is done when transferring a student but can be used to exchange a payment that is going from one item to another. If you're just trying to change the amount you're charging, you would need to use the Edit Invoice tool to adjust the fee.