When a credit memo is applied to an invoice, it reduces that invoice's balance. If the credit was applied to the wrong invoice — or the customer wants a cash refund instead — you can unapply it. The credit returns to Unsettled status and can be redirected.
When to Unapply
A credit was auto-settled against an invoice you did not intend.
The customer wants a refund instead of credit application.
The invoice the credit was applied to was voided and the credit must be re-applied elsewhere.
How to Unapply
Navigate to CRM → Customers and open the customer account.
Go to the Credit Memos section.
Open the credit memo (status: Settled).
Select the three-dot menu (⋯) and choose Unapply or Unsettle.
Confirm. The credit returns to Unsettled and the original invoice balance is restored.
Unapplying does not delete the credit memo. It remains on the account and can be re-applied to a different invoice or refunded.
After Unapplying
Once Unsettled, the credit can be:
Applied manually to the correct invoice via the invoice's payment section.
Refunded if the customer is owed cash back.
Left as available credit on the account.
To configure how unsettled credits are automatically applied going forward, see CRM - Auto-Settle Payments.