Invoice credits: apply the credit before issuing a refund
Refunds, credits, tax, and processor fees can leave invoice records messy. Apply the credit to the balance before sending money back.
A refund should not create a second accounting problem. Before returning money, decide whether the customer has an overpayment, a credit toward future work, or a corrected invoice balance, then document the tax and fee treatment plainly.
Confirm why the credit exists
Tie the credit to the original invoice, payment, customer record, and reason. An overpayment, duplicate charge, cancelled scope, returned item, courtesy discount, or deposit adjustment can each need different wording.
Separate tax and payment fees
Check whether sales tax should be reduced, whether processor fees were kept by the platform, and whether the refund changes margin on the job. The cash leaving the bank may not equal the original invoice line.
Document the next step
Show whether the amount becomes a refund, credit memo, corrected invoice, or future-work credit. Confirm contract, consumer, platform, card-network, tax, and accounting rules before promising refund timing or treating the credit as non-taxable.