If a customer sends you more money than he or she owes, there will be an amount left over at the Receive Payments window after you have applied the payment to invoices. QuickBooks keeps track of the credit amount so you can apply it the next time the customer owes you money.
Caution: If you're recording a down payment, and you are doing more than one job for the customer, be sure to specify both the customer name and the job name in the Customer:Job field. This ensures that QuickBooks will apply the down payment to invoices for the correct job.
If the payment is a down payment and there is no invoice yet, the entire payment amount is displayed in the Unapplied Amount field. QuickBooks holds the unapplied amount with this customer's name so that when you do have an invoice for this customer, you can apply the down payment amount.
The credit memo is for your customer only. It does not become part of your financial records in QuickBooks.