credit and debit memos

Credit memos are created from an existing invoice to generate a credit memo for an incorrect invoice transaction, thus reducing the amount payable to a vendor . Debit memos are created from an existing invoice to generate a debit memo for an incorrect invoice transaction, thus increasing the amount payable to the vendor. The steps outlined in this document will detail how to create a Credit Memo, but the process for creating credit memos and debit memos is the same. All amounts recorded on credit and debit memos will be allocated to purchase price variance accounts.

The following options are outlined in the Credit/Debit Memo:

• Creating a Credit/Debit Memo
• Credit/Debit Memo Header
• Memo Line Details
• Posting a Credit/Debit Memo
• Journal Transaction

Create a Credit/Debit Memo

Credit/Debit Memo Header

The  header will default the header information that was defined on the original purchase invoice.

1. In General>Purchases>Invoices, select the original posted invoice and right click to select 'Credit Memo' or 'Debit Memo'.
2. Enter the Invoice No to identify the credit or debit memo transaction.
3. In the Payable Invoice Amount, enter the total amount of the debit or credit memo.
4. The Invoice Type will be set to Debit Memo or Credit Memo depending on the type of transaction created.
5. The C/D Memo Invoice will be populated with the purchase invoice number that the memo was created from.

Memo Line Details

The line details default from the original invoice that was created. The user will enter the required values in the available fields.

1. In the Invoice Amount field, enter the dollar amount of the adjustment.
2. If there are adjustments required to add-ons, click on the child grid and enter the adjustment amount in the Rate field on the Premium AddOns or Discount AddOns tab. These amounts will then transfer to the product line detail.
3. Invoice Taxes will recalculate when the transaction is saved.

Post Debit or Credit Memo

Once the Debit or Credit Memo has been created and saved, the invoice needs to be posted. The posting process locks the purchase invoice to prevent edits, and creates the journal transaction to record the liability. The UnPost option unlocks the invoice and reverses the journal transactions.

In order for the debit or credit memo to be posted, it needs to be in Approved status.

1. If the invoice is not in Approved status, select the purchase invoice and right-click to select 'Mark Approved'.
2. In the Purchase Invoice index, select the required purchase invoice and right-click to select 'Post'.

Journal Transaction

The posting process creates the journal transaction. The journal will reverse the accounts payable accrual that was incurred when the product was received and record the payable amount to the vendor.