Sales Credit Memos

In this topic we will discuss how to correct issues that occur after an AR invoice has been created.  We will see how to create AR Credit Memos and how to cancel an AR invoice.

Summary: 

1. An A/R credit memo reverses an A/R invoice’s journal entry either partially or fully. When you create an A/R credit memo with reference to the A/R invoice, the system corrects both the quantities and values in the invoice. 
2. If the credit memo contains inventory items, then the journal entry for the credit memo will also increase the stock account and decrease the cost account. 
3. A credit memo can be created without reference to a base document, for example when you need to credit closed invoices that have been paid or for when the credit does not relate to any specific invoices. If you wish to give a credit without an impact to stock, you can select the checkbox Without Qty posting on an item row in an item-type credit memo, or you can use a service-type credit memo.  
4. You can cancel marketing documents such as A/R invoices.  A new reversing ‘cancellation’ document is created during each cancellation procedure, and both the reversing and reversed documents are closed automatically and fully reconciled. Base documents, such as a delivery, are re-opened after cancellation, and can be used as a base document again.

You can also download the document here for your records.